TTM Technologies ($TTMI)
Price: $25.13 | Date: May 07, 2025
Quick Take
TTM Technologies stands at the intersection of two massive trends: the AI infrastructure boom and defense modernization. As North America’s largest manufacturer of advanced circuit boards, TTM makes the “electronic brains” that power everything from fighter jets to AI servers.
The company just reported stellar Q1 2025 results with 14% revenue growth and expanding margins, driven by a robust $1.56 billion defense backlog and surging demand from data centers.
Despite the recent market sell-off triggered by escalating US-China tariffs, TTM’s strategic diversification of its manufacturing footprint positions it to weather trade tensions better than many peers.
With shares up 40% in the past month, institutional investors are taking notice of TTM’s unique position in multiple high-growth markets and its resilience to trade headwinds.
Note: This report is for informational purposes only and does not constitute financial advice. Always conduct your own due diligence before making investment decisions.
Stock Performance
TTMI shares have demonstrated exceptional momentum, surging 40% in the past month and 49% over the last year. The stock has established strong support at $20 after breaking out from a multi-month base. Trading volume has increased significantly during the recent rally, suggesting growing institutional interest.
If short-term technicals are of a concern, nibbling on any pullbacks towards the low-$20s (e.g., if market volatility or rotation causes a dip) would be ideal.
Notably, TTMI has shown relative strength during the recent tariff-related market turbulence, outperforming many other electronics manufacturers with higher China exposure.
Why It Made the Cut
TTM Technologies caught our attention through its exceptional combination of growth, profitability, and market positioning:
- Market Leadership: Dominant position in high-reliability electronics manufacturing, with 46% of revenue from aerospace & defense
- Exceptional Growth: Revenue up 14% year-over-year, significantly outpacing industry average of -2.54%
- Margin Expansion: Operating margins of 7.56%, nearly double the industry average of 3.86%
- Strong Backlog: $1.56 billion in aerospace & defense orders providing excellent visibility
- AI Exposure: Growing data center segment benefiting from AI infrastructure buildout, with networking revenues jumping 53% YoY
- Trade War Resilience: Strategic manufacturing footprint diversification to Malaysia and the US reduces China exposure and mitigates tariff risks
Note: These highlights represent just a fraction of our comprehensive analysis, as each stock undergoes rigorous evaluation across 50+ data points using our proprietary screening process before making it into your bi-weekly report.
Business Overview
TTM Technologies is a global leader in manufacturing printed circuit boards (PCBs) and complex electronic components. Think of PCBs as the “electronic nervous system” that makes modern technology work – they’re the sophisticated platforms that connect and control all the components in electronic devices.
TTM specializes in making the most advanced, reliable versions of these critical components, particularly for applications where failure isn’t an option.
The company operates through two main segments: aerospace & defense (47% of revenue) and commercial electronics (53%), with particular strength in data centers and automotive applications.
What sets TTM apart is its comprehensive one-stop-shop model, offering everything from design and engineering to manufacturing and testing, all with a focus on quick turnaround times.
In response to ongoing trade tensions, TTM has been actively diversifying its manufacturing footprint, with new facilities in Penang, Malaysia and Syracuse, New York expected to reach operational targets in 2025, reducing dependence on China-based production.
Market Opportunity
TTM operates at the confluence of several powerful growth trends. The defense electronics market is undergoing massive modernization, with increasing electronic content in military platforms driving demand for advanced PCBs. Simultaneously, the AI computing boom is creating unprecedented demand for data center infrastructure, where TTM’s high-performance components play a crucial role.
The company’s total addressable market continues to expand, with the global PCB market expected to reach $95 billion by 2027, growing at approximately 5.5% in 2025 despite trade tensions.
TTM’s focus on high-reliability, complex applications positions it particularly well in premium segments where technical barriers to entry are high and relationships are sticky.
The recent surge in AI infrastructure spending has created an additional growth vector, with the company’s networking segment growing an impressive 53% year-over-year amid increased demand for switches used in generative AI applications.
Furthermore, the push for supply chain resilience and reshoring of critical components for national security reasons is likely to benefit TTM’s US-based manufacturing capabilities.
Financial Analysis
TTM’s financial performance demonstrates strong execution and improving fundamentals:
- Revenue Growth: $2.52 billion TTM revenue, up 11.65% year-over-year
- Margin Expansion: Operating margin improved to 7.56%, reflecting shift to higher-value products
- Earnings Growth: EPS up 208.46% year-over-year in latest quarter, with Q1 non-GAAP EPS reaching a record $0.50
- Solid Balance Sheet: Current ratio of 2.07, with manageable debt levels
- Strong Bookings: Q1 book-to-bill ratio of 1.10 indicates continued demand momentum
Risk Assessment
While TTM’s position is strong, investors should consider several key risks:
- Valuation: Trading at 33.17x TTM earnings, 57.9% above industry average
- Leadership Transition: Upcoming COO change in July 2025 could create short-term uncertainty
- Concentration Risk: High reliance on aerospace/defense sector
- Competition: Increasing pressure from Asian manufacturers in commercial sectors
- Trade Tensions: Recent escalation in US-China tariffs (up to 35% on most imported electronics from China) could increase costs for imported raw materials and components, though TTM’s diversified manufacturing strategy mitigates much of this risk
- Automotive Weakness: The company’s automotive segment (11% of sales) has seen temporary softness due to inventory corrections and weak demand, though this appears cyclical
Bottom Line
TTM Technologies represents a compelling opportunity to invest in both defense modernization and AI infrastructure growth through a market-leading manufacturer of critical electronic components.
The company’s strong execution, expanding margins, and robust backlog provide solid foundational support, while growing demand from data centers offers significant upside potential.
The company’s strategic diversification of its manufacturing footprint to Malaysia and the US positions it well to navigate the current trade tensions, potentially gaining market share from competitors with higher China exposure.
While the recent price surge and upcoming leadership transition warrant attention, TTM’s strong competitive position and exposure to multiple growth drivers make it an attractive consideration for growth-focused portfolios, particularly in an environment where supply chain resilience is increasingly valued.
Monitor the book-to-bill ratio, operating margins, and progress on the Penang facility reaching breakeven by Q3 2025 as key indicators of continued momentum and successful execution of the company’s tariff mitigation strategy.