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

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TSMC (TSM - Free Report) closed the most recent trading day at $87.74, moving +0.56% from the previous trading session. This move outpaced the S&P 500's daily loss of 0.15%. Elsewhere, the Dow lost 0.28%, while the tech-heavy Nasdaq added 3.16%.

Coming into today, shares of the chip company had lost 8.51% in the past month. In that same time, the Computer and Technology sector lost 3.13%, while the S&P 500 lost 5.39%.

Investors will be hoping for strength from TSMC as it approaches its next earnings release. The company is expected to report EPS of $1.21, down 13.57% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $17.3 billion, down 1.53% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $5.58 per share and revenue of $78.45 billion. These totals would mark changes of -15.07% and +3.39%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for TSMC. These revisions typically reflect the latest short-term business trends, which can change frequently. 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. 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.

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. Over the past month, the Zacks Consensus EPS estimate has moved 0.3% lower. TSMC is currently sporting a Zacks Rank of #3 (Hold).

Looking at its valuation, TSMC is holding a Forward P/E ratio of 15.63. This valuation marks a no noticeable deviation compared to its industry's average Forward P/E of 15.63.

Investors should also note that TSM has a PEG ratio of 0.78 right now. 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 industry currently had an average PEG ratio of 0.78 as of yesterday's close.

The Semiconductor - Circuit Foundry industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 108, putting it in the top 43% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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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