TTM forecasts at least $6.5 billion in 2027 sales; shares fall 27.6%

TTM Technologies describes itself as a leading global manufacturer of technology products, including mission systems, radio-frequency parts and advanced circuit boards. It reports two segments: aerospace and defense, and commercial.¹ In the third quarter, data center and networking gear made up 41% of sales, driven by demand from artificial intelligence, and aerospace and defense made up 34%. Its main circuit-board rivals are mostly based in China and Taiwan, and its commercial rivals include AT&S.² Sales are concentrated. Two customers made up about 26% of second-quarter sales, and on the August call management said a third was getting very close to 10%.³

The company has been growing fast. Sales were $2.91 billion in 2025.¹ In August TTM guided to about $4.4 billion for 2026 without its pending acquisitions; it now expects $4.47 billion to $4.49 billion including the closed Swiss Technology Group and Epiq deals, so the increase is not a like-for-like raise.² Sales for 2026 so far, through the end of the third quarter, were $3.05 billion.³

It has also been buying. On June 17, 2026, TTM announced deals for Swiss Technology Group and ILFA, two European board makers. On August 17, 2026, it agreed to buy Epiq Solutions, a maker of software-defined radios, for about $1.1 billion in cash.¹ To pay for it, TTM sold $500 million of 6.750% notes due 2034 and took two new term loans of $300 million and $800 million. Epiq closed on September 30, 2026, just after the quarter ended on September 28, 2026, and the Swiss deal has also closed.² The Swiss purchase was paid with borrowing on TTM's revolving credit line, a bank line it can draw and repay, which the note money could help pay down.³

The results came out on a rough day for AI stocks. A sell-off in that industry pulled markets lower worldwide; the S&P 500 fell 1.2%, its worst day since July, and the Nasdaq composite fell 2.6%. The main chip index fell 6.7%, the Wall Street Journal reported.

In the quarter that ended September 28, 2026, net sales were $1.2 billion, up 60% and a record. That was about 6% above the top of the $1.10 billion to $1.14 billion range TTM gave in August.¹ Adjusted earnings of $1.46 a share were about 15% above the top of the $1.21 to $1.27 range. Data center and networking sales rose 115%, and aerospace and defense sales rose 21%.² New orders were 2.13 times the quarter's sales, and the defense program backlog reached $2.0 billion.³

TTM's favorite profit measure is adjusted EBITDA: earnings before interest, tax, depreciation and amortization, with stock pay and some other items also added back. It was $242.3 million, or 20.1% of sales, against $120.9 million a year earlier, and its margin topped 20% for the first time.¹ Operating income under standard accounting more than doubled, to $162.3 million from $71.9 million.²

Net profit under standard accounting was much thinner. It was $84.8 million, or $0.79 a share, against $157.8 million, or $1.46, on the adjusted measure, a gap of $73.0 million.¹ The largest single add-back was stock pay of $24.1 million, up from $11.6 million; tax was $56.9 million, or 40% of $141.7 million of pre-tax profit, against $8.8 million a year earlier, and swapping in TTM's lower adjusted tax rate added back $18.7 million.² Restructuring and deal charges were $9.8 million, and losses on derivative contracts were $6.1 million.³ The adjusted figures add back items like stock pay and use a separate tax rate. TTM gave no bridge from its 2027 earnings forecast to standard accounting, so readers cannot see the reported profit it expects.⁴

Cash flow improved but is still small next to the spending plans. Operating cash flow was $154.7 million, and after $79.9 million of capital spending, free cash flow was $74.8 million, up from $42.6 million a year earlier.¹ Year to date, free cash flow was only $35.7 million, because capital spending reached $237.1 million. If the 2026 spending plan of $345.0 million to $365.0 million in the 10-Q still holds, about $108 million to $128 million more goes out in the fourth quarter.² Money owed by customers also grew. Receivables were $836.4 million and contract assets, work done but not yet billed, were $793.6 million, against $563.7 million and $468.0 million at the end of 2025.³

Each deal has two sides. For Epiq, TTM paid about $1.1 billion in cash, subject to working capital and other adjustments, with part held in escrow for a later price adjustment. In August it priced Epiq at 17.4 times expected 2027 adjusted EBITDA, counting $9 million of planned yearly savings.¹ That works out to about $63 million of expected 2027 earnings on that measure, by our arithmetic. TTM itself says Epiq will lower its adjusted earnings per share in 2027 and add to them in 2028. The price is about 14% of TTM's market value after the drop.²

On October 19, 2026, TTM agreed to buy Ophir Optics from MKS Inc. for about $650 million in cash. Ophir makes infrared thermal imaging and laser optics in Israel and Romania for defense, security and industrial customers.¹ TTM gets the optics business but not MKS's separate Ophir Instruments unit or the Ophir brand. The price is 10.3 times expected 2027 adjusted EBITDA, or about $63 million, with no bridge to standard accounting.² The deal needs regulatory approvals and government consents, is expected to close in the second quarter of 2027, and is not in the forecast. TTM also agreed to buy two small British board plants, Merlin, for an undisclosed amount, expected to close in the fourth quarter of 2026.³

On October 12, 2026, TTM announced a $400 million plan to add capacity at four plants in China and one in Penang, Malaysia. It comes on top of a $1.2 billion investment commitment for 2025 to 2029.¹ TTM says the plan rests on ongoing talks with long-standing customers that point to higher demand; the release cites no signed orders. Ophir and the Asia expansion are to be paid with cash, future cash flow and borrowing on the revolving line.²

The balance sheet has changed fast. On September 28, 2026, TTM had $876.3 million of cash against $184.0 million of short-term debt and $1.46 billion of long-term debt, or about $768 million of net debt.¹ On September 30, 2026, it closed Epiq with the new term loans. If the roughly $1.1 billion price came from new borrowing and cash, net debt rose to about $1.87 billion; that is our estimate, not a company figure.² TTM's own measure put net debt at 2.8 times a year of adjusted EBITDA, counting the bought businesses, up from 0.9 times after the second quarter. In August it had estimated 2.3 times at closing, and it now targets 1.5 to 2.0 times by the time Ophir closes.³

The banks' financial tests cover only the revolving line and the Term A loan. Debt may not exceed 4.50 times earnings, or 5.00 times in a holiday period after a big purchase, and earnings must cover interest at least 2.50 times.¹ The banks' definitions may not match TTM's 2.8 times, and TTM last reported being in compliance in its 10-Q.² Interest is not a strain yet. Third-quarter adjusted EBITDA covered interest expense of $12.8 million about 19 times. That cover will shrink: the new notes alone cost $33.75 million a year at 6.750%, and the new Term B loan pays 2.00 percentage points over a benchmark rate.³

Short-term debt, including the current part of long-term debt, rose to $184.0 million on September 28, 2026 from $3.8 million at the end of 2025; beyond that, nothing large comes due before 2029.¹ The older $500 million of 4.00% notes are due in March 2029, and the $400 million Term Loan B is due in May 2030.² But the revolving line and Term A can come due 91 days before those 2029 notes if TTM's liquidity is below 125% of that earlier debt or its leverage under the bank definition is above 2.50 times, and TTM's own net measure was 2.8 times on September 30, 2026.³ Bank lenders hold first-priority liens on substantially all of TTM's assets, so they are paid first. The new 6.750% notes are unsecured and rank behind that secured debt, and TTM had no preferred stock at the end of 2025.⁴

Near-term cash needs are large next to cash on hand. The Ophir price, the rest of this year's planned capital spending and the $400 million plan add up to about $1.16 billion to $1.18 billion, against $876.3 million of cash on September 28, 2026, a figure struck before part of the new note money went to pay for Epiq on September 30.¹ The $400 million has no stated timetable, so not all of it falls due soon. In the 10-Q, $185.4 million of cash sat abroad, mostly in China, and the revolving line had $913.9 million available before the Swiss draw.²

Dilution is modest because the deals were paid in cash. Diluted shares averaged 107.7 million in the third quarter against 105.7 million basic shares, a gap that reflects stock awards and options. TTM had 105,348,864 shares outstanding on July 31, 2026.

The market did not reward the beat. The stock closed at $102.05 on October 21, 2026, and was $73.89 at the close on October 22, 2026, down 27.6%. The S&P 500 fund fell 1.2% over the same span.¹ The slide started earlier: the stock closed at $133.25 on October 5, 2026. An officer, Dale Knecht, sold shares at about $210 in June and sold 26,198 more at $142.00 on August 10, 2026.² In August, the chief executive bought 10,000 shares at $111.77 and a director bought 5,000 at $104.90, both well above today's price.³ At $73.89, TTM's market value is about $7.78 billion, down from about $10.75 billion. That is about 8.3 to 9.1 times the 2027 adjusted earnings forecast, against 11.5 to 12.6 times the day before.⁴

These are management's goals, not results. For the fourth quarter, TTM expects sales of $1.42 billion to $1.44 billion, 18% to 20% above the third quarter with the new businesses included, and adjusted earnings of $1.77 to $1.83 a share.¹ For 2026 it expects $4.47 billion to $4.49 billion of sales and $4.97 to $5.03 of adjusted earnings a share. For 2027 it expects $6.5 billion to $6.75 billion of sales, 45% to 51% more, and $8.10 to $8.90 a share, 61% to 79% more.² That forecast counts closed deals and their financing costs but leaves out Ophir, Merlin and any other deal not yet closed. The quarter's numbers are preliminary until the 10-Q is filed.³

For comparison, in August management set a goal of 15% to 20% yearly growth without acquisitions for 2027 and 2028.

The strongest bull case is that demand is running far ahead of shipments. Orders were 2.13 times sales, data center and networking sales more than doubled, and the adjusted margin passed 20%.¹ TTM beat its own guidance in the second quarter and again in the third, and its 2027 forecast already carries the interest on its new debt. Insiders bought in August at $104.90 to $111.77, and at about 9 times the low end of the 2027 forecast the stock already prices in a lot of doubt.²

The bear case, strongest point first. The growth leans on AI spending by a few buyers: data center and networking is 41% of sales, two customers were about 26% of second-quarter sales, and the $400 million build-out rests on customer talks.¹ Debt has roughly tripled as a multiple of earnings in one quarter, and more buying is planned on the revolving line. Reported profit is about half the adjusted figure, and year-to-date free cash flow was only $35.7 million.² TTM expects Epiq to lower 2027 adjusted earnings per share. Ophir, with plants in Israel and Romania, still needs regulatory approvals and government consents.³

What would prove the bull case wrong: a 10-Q that differs from these preliminary figures, fourth-quarter sales below the $1.42 billion floor, or leverage stuck near 2.8 times when Ophir closes. What would prove the bear case wrong: leverage back inside 1.5 to 2.0 times by then, with orders still above sales.¹ The dated markers: Merlin is expected to close in the fourth quarter of 2026, the new notes pay their first interest on April 1, 2027, and Ophir is expected to close in the second quarter of 2027. Management held its results call on October 22, 2026, at 8:30 a.m. Eastern Time.²

No filing, release or call text in our record explains the size of the fall. The call transcript page we have holds only its title, and we found no analyst notes from that day, so we cannot say whether the market disliked the 2027 forecast, the debt or the AI sell-off.

The release does not split the 2027 forecast between bought businesses and TTM's own growth. TTM has not given Epiq's or Swiss Technology Group's sales or profit in dollars, so the jump cannot be checked against the 15% to 20% organic goal.

The filings give the 6.750% coupon and the Term B margin, but not the Term A rate in effect, the benchmark rate or a 2027 interest forecast.

The release does not say why net leverage at September 30, 2026 came in above the 2.3 times TTM estimated in August, or exactly how its measure is built.

No filing says how much of the revolving line is drawn after the Swiss and Epiq closings.

The plan gives no timetable, capacity or sales figures, so its cash timing and payback are unknown.

TTM has not disclosed what it paid for Swiss Technology Group or what it will pay for ILFA or Merlin.