Back to top

Image: Bigstock

Why TSMC (TSM) Outpaced the Stock Market Today

Read MoreHide Full Article

TSMC (TSM - Free Report) closed the latest trading day at $99.58, indicating a +1.06% change from the previous session's end. This move outpaced the S&P 500's daily gain of 0.13%. Elsewhere, the Dow saw an upswing of 0.01%, while the tech-heavy Nasdaq appreciated by 0.08%.

The chip company's shares have seen an increase of 6.06% over the last month, surpassing the Computer and Technology sector's gain of 5.13% and the S&P 500's gain of 3.28%.

The upcoming earnings release of TSMC will be of great interest to investors. The company is predicted to post an EPS of $1.34, indicating a 26.37% decline compared to the equivalent quarter last year. Meanwhile, our latest consensus estimate is calling for revenue of $18.99 billion, down 4.71% from the prior-year quarter.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $4.97 per share and revenue of $66.45 billion. These totals would mark changes of -24.35% and -12.42%, respectively, from last year.

Investors should also take note of any recent adjustments to analyst estimates for TSMC. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the company's business health and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the past month, there's been a 2.97% rise in the Zacks Consensus EPS estimate. TSMC presently features a Zacks Rank of #3 (Hold).

In terms of valuation, TSMC is currently trading at a Forward P/E ratio of 19.83. This represents no noticeable deviation compared to its industry's average Forward P/E of 19.83.

It's also important to note that TSM currently trades at a PEG ratio of 2.77. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The Semiconductor - Circuit Foundry industry currently had an average PEG ratio of 2.77 as of yesterday's close.

The Semiconductor - Circuit Foundry industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 90, placing it within the top 36% of over 250 industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. 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.


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