Why Did TTM Technologies Stock Rebound on Friday?

TTM Technologies Inc. shares rebounded in Friday's premarket trading after plunging nearly 28% on Thursday, despite the company reporting better-than-expected third-quarter earnings and raising its guidance.

The selloff stemmed from investors weighing data center project delays, higher borrowing costs related to acquisitions, and a lower-than-expected 2027 revenue outlook. Thursday's sharp decline may also reflect profit-taking after a rally driven by strong demand in artificial intelligence and defense technology.

Third-Quarter Earnings Beat Expectations

TTM reported adjusted earnings per share of $1.46, above the analyst consensus estimate of $1.25.

Revenue surged 60% year-over-year to $1.204 billion, surpassing the $1.13 billion expectation.

Non-GAAP net income more than doubled to $157.8 million from $71 million in the same period last year.

Adjusted EBITDA climbed to $242.3 million from $120.9 million, with a margin of 20.1%.

TTM Raises 2026 Guidance, Sets 2027 Targets

TTM raised its full-year 2026 revenue forecast to $4.47 billion to $4.49 billion from $4 billion, above Wall Street's expectation of $4.413 billion.

The company also lifted its adjusted EPS outlook to $4.97 to $5.03, exceeding the consensus estimate of $4.81.

For the fourth quarter, TTM expects revenue of $1.42 billion to $1.44 billion, versus the analyst estimate of $1.433 billion. Adjusted EPS is projected at $1.77 to $1.83, compared to the expected $1.81.

For 2027, TTM forecasts revenue of $6.5 billion to $6.75 billion. The company also projects adjusted EPS of $8.10 to $8.90, while Wall Street expects $7.24.

See also:

Top Quality Stocks

Data Center Delays Raise Concerns

TTM's data center and networking segment accounted for 41% of third-quarter revenue, with sales up 115% year-over-year.

However, the business came in roughly 10% below the company's prior guidance, raising questions about the pace of data center expansion.

On the earnings call, CEO Edwin Roks attributed the shortfall to customer project timing rather than manufacturing issues.

He said two of the company's three initial projects are performing well, while the third continues to ramp up.

Meanwhile, lead times for certain materials have doubled from about 12 weeks to 24 weeks or longer, adding uncertainty to production schedules.

$650 Million Ophir Deal Expands Acquisition Strategy

TTM also plans to acquire Ophir Optics from MKS Inc. for approximately $650 million in cash.

The acquisition values Ophir at roughly 10.3 times its expected fiscal 2027 adjusted EBITDA, excluding potential synergies.

TTM expects the acquisition to be immediately accretive to its adjusted EBITDA margin and non-GAAP diluted EPS. The deal is expected to close in the second quarter of 2027.

The company plans to fund the transaction and its previously announced $400 million Asia capacity expansion through existing cash, future cash flows, and borrowings under its revolving credit facility.

As of September 28, TTM held $876.3 million in cash and cash equivalents.

Rising Debt Costs May Pressure Earnings

The company's acquisition strategy is also increasing financing costs.

CFO Dan Boehle said debt related to the Epiq acquisition and the planned Ophir purchase will add approximately $20 million in quarterly interest expense, pressuring earnings per share.

Following the completion of the Epiq acquisition, TTM's net leverage stood at 2.8 times pro forma adjusted EBITDA.

However, management expects leverage to decline to the target range of 1.5 to 2 times by the expected closing of the Ophir deal.

Despite strong third-quarter results, higher borrowing costs, combined with data center project delays and a lower-than-expected 2027 revenue outlook, have raised concerns.

TTMI Stock Movement: TTM Technologies shares rose 3.41% in Friday's premarket trading to $76.41.