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

TSMC (TSM) closed at $63.85 in the latest trading session, marking a -1.44% move from the prior day. This change lagged the S&P 500's daily gain of 1.05%. Meanwhile, the Dow gained 1.44%, and the Nasdaq, a tech-heavy index, added 0.66%.

Prior to today's trading, shares of the chip company had gained 17.7% over the past month. This has outpaced the Computer and Technology sector's gain of 6.34% and the S&P 500's loss of 1.56% in that time.

Investors will be hoping for strength from TSM as it approaches its next earnings release, which is expected to be July 16, 2020. The company is expected to report EPS of $0.73, up 78.05% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $10.36 billion, up 33.72% from the year-ago period.

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.

Any recent changes to analyst estimates for TSM should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an 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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. TSM currently has a Zacks Rank of #2 (Buy).

In terms of valuation, TSM is currently trading at a Forward P/E ratio of 23.14. For comparison, its industry has an average Forward P/E of 23.14, which means TSM is trading at a no noticeable deviation to the group.

We can also see that TSM currently has a PEG ratio of 1.39. 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. Semiconductor - Circuit Foundry stocks are, on average, holding a PEG ratio of 1.39 based on yesterday's closing prices.

The Semiconductor - Circuit Foundry industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 6, putting it in the top 3% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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