TTM Technologies Falls on $500M Bond for Epiq Acquisition
TTM Technologies stock fell 10.4% as investors weighed a proposed $500 million bond sale to fund its acquisition of Epiq — piling debt onto a balance sheet that already carries $1.1 billion in obligat
TTM Technologies Falls on $500M Bond for Epiq Acquisition
NEW YORK, September 15 —
TTM Technologies, Inc. (TTMI) fell 10.4% on a proposed $500 million bond sale for the Epiq acquisition, landing back near the price CEO Edwin Roks paid three weeks earlier for a $1.1 million open-market purchase. The CEO's conviction has a strong earnings case; $1.6 billion in combined debt on negative free cash flow is the counter-argument.
- Four consecutive EPS beats, most recently $0.99 vs. $0.90 consensus; trailing 12-month revenue $3.38B, up 37.4% year over year.
- Operating cash flow $323M trailing; free cash flow -$19M after capex; $1.1B debt against $510M cash.
- Analyst consensus target $214.25 vs. $113.22 current price; CEO Roks bought 10,000 shares at $111.77 on August 25.
The Sell Pattern the Buy Doesn't Erase
TTM Technologies, a maker of printed circuit boards, RF components, and defense electronics including the AN/APS-153 radar and communications suites for MH-60R/S helicopters, saw its entire senior executive bench sell in June at $203 to $218. The COO, CFO, CHRO, CLO, and two segment presidents all filed Form 4s on June 25. Then SVP Dale Martin Knecht sold 26,198 shares at $142 on August 10, the largest single open-market sale in the 90-day window, at roughly $30 above where CEO Roks and director Rex Geveden subsequently bought at $111.77 and $104.90, respectively. The CEO's purchase is a conviction signal; the surrounding context is not.
Four Beats, One Catch
The earnings acceleration is real: TTM's EPS ran from $0.67 to $0.70 to $0.75 to $0.99 over the last four reported quarters, each beating consensus, with the August 6 filing showing the largest beat in magnitude. Trailing twelve-month revenue of $3.38 billion, up 37.4%, reflects demand across its A&D, Commercial, and RF&S Components segments in a sustained defense-spending environment. But $323 million in operating cash flow has not yet produced positive free cash flow; capex exceeds operating generation by $19 million. Every incremental interest obligation from the proposed Epiq bond sale lands on a balance sheet that cannot currently fund its own growth.
| Ticker | Mkt cap | Fwd P/E | 52-wk |
|---|---|---|---|
| TTMI | $11.9B | 16.4x | +129.2% |
| VICR | $8.5B | 33.3x | +256.0% |
| FN | $13.7B | 17.6x | +6.6% |
| STRL | $14.5B | 18.6x | +46.4% |
| SANM | $10.5B | 14.1x | +64.4% |
| CLS | $39.9B | 16.2x | +26.9% |
FCF Is the Thesis-Breaker
At 16.4x forward earnings against a $214.25 analyst consensus target, the valuation gap is genuine. The CEO's $1.1 million purchase sets a credibility floor: if the next earnings report shows FCF improving toward positive, a defense-electronics business acquiring its way into scale deserves a rerate. If FCF remains negative as interest obligations on $1.6 billion in combined debt compound, the analyst-target gap closes from the wrong direction. A DCF calculator can stress-test both scenarios; run the full TTM Technologies, Inc. deep-dive → for the latest numbers.
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TTM Technologies stock fell 10.4% as investors weighed a proposed $500 million bond sale to fund its acquisition of Epiq — piling debt onto a balance sheet that already carries $1.1 billion in obligations and negative free cash flow. Three weeks before the announcement, TTM's own CEO had stepped in to buy $1.1 million of stock at what appeared to be a floor.