Back to top

Image: Bigstock

TSMC (TSM) Dips More Than Broader Markets: What You Should Know

Read MoreHide Full Article

In the latest trading session, TSMC (TSM - Free Report) closed at $108.79, marking a -0.75% move from the previous day. This change lagged the S&P 500's 0.53% loss on the day. At the same time, the Dow lost 0.29%, and the tech-heavy Nasdaq lost 0.1%.

Heading into today, shares of the chip company had lost 11.71% over the past month, lagging the Computer and Technology sector's loss of 6.75% and the S&P 500's loss of 4.24% in that time.

TSMC will be looking to display strength as it nears its next earnings release. In that report, analysts expect TSMC to post earnings of $1.27 per share. This would mark year-over-year growth of 32.29%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $16.97 billion, up 31.38% from the year-ago period.

TSM's full-year Zacks Consensus Estimates are calling for earnings of $5.45 per share and revenue of $73.05 billion. These results would represent year-over-year changes of +32.28% and +28.55%, respectively.

Investors might also notice recent changes to analyst estimates for TSMC. 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.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. TSMC is currently a Zacks Rank #2 (Buy).

Valuation is also important, so investors should note that TSMC has a Forward P/E ratio of 20.12 right now. For comparison, its industry has an average Forward P/E of 20.12, which means TSMC is trading at a no noticeable deviation to the group.

It is also worth noting that TSM currently has a PEG ratio of 1.04. 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. Semiconductor - Circuit Foundry stocks are, on average, holding a PEG ratio of 1.04 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 9, putting it in the top 4% 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.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Taiwan Semiconductor Manufacturing Company Ltd. (TSM) - free report >>

Published in