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TSMC (TSM) Gains But Lags Market: What You Should Know

Zacks Equity Research

TSMC (TSM) closed the most recent trading day at $50.33, moving +0.1% from the previous trading session. This change lagged the S&P 500's 0.48% gain on the day. Elsewhere, the Dow lost 0.07%, while the tech-heavy Nasdaq added 1.29%.

Wall Street will be looking for positivity from TSM as it approaches its next earnings report date. On that day, TSM is projected to report earnings of $0.73 per share, which would represent year-over-year growth of 78.05%. Meanwhile, our latest consensus estimate is calling for revenue of $10.36 billion, up 33.72% from the prior-year quarter.

TSM's full-year Zacks Consensus Estimates are calling for earnings of $2.80 per share and revenue of $46.17 billion. These results would represent year-over-year changes of +30.23% and +33.31%, respectively.

It is also important to note the recent changes to analyst estimates for TSM. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.18% higher. TSM is holding a Zacks Rank of #1 (Strong Buy) right now.

Digging into valuation, TSM currently has a Forward P/E ratio of 17.99. This valuation marks a no noticeable deviation compared to its industry's average Forward P/E of 17.99.

We can also see that TSM currently has a PEG ratio of 1.08. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Semiconductor - Circuit Foundry was holding an average PEG ratio of 1.08 at yesterday's closing price.

The Semiconductor - Circuit Foundry industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 1, which puts it in the top 1% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow TSM in the coming trading sessions, be sure to utilize Zacks.com.


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