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

Zacks Equity Research
·3 min read

In the latest trading session, TSMC (TSM) closed at $105.56, marking a -0.56% move from the previous day. This change lagged the S&P 500's daily loss of 0.22%. Elsewhere, the Dow lost 0.23%, while the tech-heavy Nasdaq lost 0.38%.

Coming into today, shares of the chip company had gained 9.41% in the past month. In that same time, the Computer and Technology sector gained 5.2%, while the S&P 500 gained 2.78%.

Investors will be hoping for strength from TSM as it approaches its next earnings release. On that day, TSM is projected to report earnings of $0.92 per share, which would represent year-over-year growth of 26.03%. Meanwhile, our latest consensus estimate is calling for revenue of $12.90 billion, up 24.1% from the prior-year quarter.

TSM's full-year Zacks Consensus Estimates are calling for earnings of $3.48 per share and revenue of $47.82 billion. These results would represent year-over-year changes of +61.86% and +38.07%, respectively.

Any recent changes to analyst estimates for TSM should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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 remained stagnant. TSM currently has a Zacks Rank of #3 (Hold).

Investors should also note TSM's current valuation metrics, including its Forward P/E ratio of 30.55. This represents a no noticeable deviation compared to its industry's average Forward P/E of 30.55.

Meanwhile, TSM's PEG ratio is currently 1.43. 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 1.43 based on yesterday's closing prices.

The Semiconductor - Circuit Foundry industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 132, which puts it in the bottom 49% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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