TSMC (TSM) Outpaces Stock Market Gains: What You Should Know

TSMC (TSM) closed at $78.38 in the latest trading session, marking a +0.59% move from the prior day. The stock outpaced the S&P 500's daily gain of 0.3%. At the same time, the Dow added 0.2%, and the tech-heavy Nasdaq gained 0.37%.

Coming into today, shares of the chip company had lost 4.69% in the past month. In that same time, the Computer and Technology sector lost 5.52%, while the S&P 500 lost 5.02%.

Investors will be hoping for strength from TSM as it approaches its next earnings release. The company is expected to report EPS of $0.81, up 30.65% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $11.45 billion, up 21.84% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $3.14 per share and revenue of $43.59 billion, which would represent changes of +46.05% and +25.86%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for TSM. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. TSM currently has a Zacks Rank of #3 (Hold).

In terms of valuation, TSM is currently trading at a Forward P/E ratio of 24.85. Its industry sports an average Forward P/E of 24.85, so we one might conclude that TSM is trading at a no noticeable deviation comparatively.

It is also worth noting that TSM currently has a PEG ratio of 1.26. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Semiconductor - Circuit Foundry was holding an average PEG ratio of 1.26 at yesterday's closing price.

The Semiconductor - Circuit Foundry industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 126, putting it in the top 50% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. 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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