Here is a fun little puzzle from this earnings season: a company beats estimates, raises guidance, and its stock drops nearly 28% in a single day. Then it bounces back the next morning. Welcome to TTM Technologies Inc. (TTMI), where the numbers were great and the vibes were apparently not.

The printed circuit board maker rebounded in premarket trading Friday after that brutal Thursday selloff, which came despite stronger-than-expected third-quarter earnings and raised guidance. Investors, it turns out, were reading past the headline beat and into the fine print.

What was in that fine print? Data center project delays, rising acquisition-related borrowing costs and a weaker-than-expected 2027 revenue outlook. According to market data, Thursday's sharp decline may also have reflected profit-taking following a rally fueled by strong demand for artificial intelligence and defense technologies. When a stock has run hard on a theme, a good quarter sometimes just gives people a reason to cash out.

The Quarter Itself Was Genuinely Strong

Let's give credit where it's due. TTM reported adjusted earnings of $1.46 per share, comfortably beating analysts' consensus estimate of $1.25.

Revenue surged 60% year over year to $1.204 billion, sailing past the $1.130 billion estimate. Non-GAAP net income more than doubled to $157.8 million from $71 million a year earlier. Adjusted EBITDA climbed to $242.3 million from $120.9 million, with a margin of 20.1%.

Those are the kind of numbers that usually get a stock a nice little pop. This time, the market had other ideas.

Guidance Went Up, With One Asterisk

TTM raised its full-year 2026 revenue forecast to $4.47 billion-$4.49 billion from $4 billion, above Wall Street's estimate of $4.413 billion. It also lifted its adjusted earnings outlook to $4.97-$5.03 per share, exceeding the $4.81 consensus estimate.

For the fourth quarter, TTM expects revenue of $1.42 billion-$1.44 billion, compared with analysts' estimate of $1.433 billion. Adjusted earnings are projected at $1.77-$1.83 per share, versus the $1.81 estimate.

Then there is 2027. TTM projected revenue of $6.5 billion-$6.75 billion, and forecast adjusted earnings of $8.10-$8.90 per share, compared with Wall Street's $7.24 estimate. The earnings number looks great on its face. But the revenue outlook landed below what the market was hoping for, and that appears to be where the disappointment crept in.

The Data Center Story: Great Growth, Slower Timing

Here is the part that really got investors' attention. TTM's Data Center and Networking segment accounted for 41% of third-quarter revenue, with sales jumping 115% year over year. That is the AI-adjacent growth engine, and it is humming.

But the business performed about 10% below the company's previous guidance, which raises an uncomfortable question about the pace of data center expansion. If this is the hottest part of the market, why is it coming in light?

During the earnings call, CEO Edwin Roks attributed the shortfall to customer project timing rather than manufacturing problems. He said two of the company's three initial programs were performing well, while the third continued to ramp up. In other words: not a broken factory, just a schedule that slipped.

Meanwhile, some material lead times have doubled from approximately 12 weeks to 24 weeks or longer, adding uncertainty to production schedules. That is the kind of detail that makes investors nervous, because it is hard to tell whether it is a temporary bottleneck or the start of something longer.

A $650 Million Deal and a Bigger Borrowing Bill

TTM also plans to acquire Ophir Optics from MKS Inc. (MKSI) for approximately $650 million in cash. The purchase values Ophir at about 10.3 times expected fiscal 2027 adjusted EBITDA, excluding potential synergies.

TTM expects the acquisition to immediately boost its adjusted EBITDA margin and non-GAAP diluted earnings per share. The transaction is expected to close in the second quarter of 2027.

The company plans to finance the deal and its previously announced $400 million capacity expansion in Asia through existing cash, future cash flow and borrowings under its revolving credit facility. TTM ended Sept. 28 with $876.3 million in cash and cash equivalents.

That is a lot of moving parts, and the financing side is where things get less fun. CFO Dan Boehle said debt associated with the Epiq acquisition and planned Ophir purchase would add approximately $20 million in quarterly interest expenses, weighing on earnings per share.

Following the Epiq acquisition, TTM's net leverage ratio stood at 2.8 times pro forma adjusted EBITDA. Management expects leverage to decline to its target range of 1.5 to 2 times by the anticipated closing of the Ophir transaction. That is the plan, anyway. Markets tend to price the current leverage before they price the future deleveraging.

The Bottom Line

Put it all together and you get a company that is growing fast, buying up assets and betting big on AI and defense demand, while carrying more debt and facing some near-term timing wobbles. The higher borrowing costs, combined with data center project delays and a 2027 revenue outlook below expectations, have raised concerns despite the strong third-quarter performance.

Whether Thursday's selloff was an overreaction or a rational repricing is the question of the week. Friday's early trading suggests at least some investors think the former.

TTMI Price Action: TTM Technologies shares were up 3.41% at $76.41 during premarket trading on Friday, according to market data.