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TSMC (TSM) Beats Stock Market Upswing: What Investors Need to Know

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In the latest trading session, TSMC (TSM - Free Report) closed at $101.60, marking a +0.64% move from the previous day. The stock exceeded the S&P 500, which registered a gain of 0.46% for the day. Elsewhere, the Dow gained 0.48%, while the tech-heavy Nasdaq added 0.7%.

Shares of the chip company have appreciated by 4.7% over the course of the past month, outperforming the Computer and Technology sector's gain of 4.16% and lagging the S&P 500's gain of 4.85%.

The investment community will be closely monitoring the performance of TSMC in its forthcoming earnings report. In that report, analysts expect TSMC to post earnings of $1.34 per share. This would mark a year-over-year decline of 26.37%. In the meantime, our current consensus estimate forecasts the revenue to be $18.99 billion, indicating a 4.71% decline compared to the corresponding quarter of the prior year.

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.

It is also important to note the recent changes to analyst estimates for TSMC. Such recent modifications usually signify the changing landscape of near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the company's business operations and its ability to generate profits.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. 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.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. TSMC presently features a Zacks Rank of #3 (Hold).

Digging into valuation, TSMC currently has a Forward P/E ratio of 20.31. This signifies no noticeable deviation in comparison to the average Forward P/E of 20.31 for its industry.

We can additionally observe that TSM currently boasts a PEG ratio of 2.83. 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. By the end of yesterday's trading, the Semiconductor - Circuit Foundry industry had an average PEG ratio of 2.83.

The Semiconductor - Circuit Foundry industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 90, positioning it in the top 36% of all 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.


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