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

Zacks Equity Research
·3 min read

In the latest trading session, TSMC (TSM) closed at $104.88, marking a +0.57% move from the previous day. This change outpaced the S&P 500's 0.39% loss on the day. Meanwhile, the Dow gained 0.12%, and the Nasdaq, a tech-heavy index, lost 0.1%.

Prior to today's trading, shares of the chip company had gained 7.94% over the past month. This has outpaced the Computer and Technology sector's gain of 7.06% and the S&P 500's gain of 4.06% in that time.

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, the Zacks Consensus Estimate for revenue is projecting net sales of $12.90 billion, up 24.1% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $3.48 per share and revenue of $47.82 billion. These totals would mark changes of +61.86% and +38.07%, respectively, from last year.

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. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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. Within the past 30 days, our consensus EPS projection remained stagnant. TSM is holding a Zacks Rank of #3 (Hold) right now.

Investors should also note TSM's current valuation metrics, including its Forward P/E ratio of 30.01. Its industry sports an average Forward P/E of 30.01, so we one might conclude that TSM is trading at a no noticeable deviation comparatively.

Investors should also note that TSM has a PEG ratio of 1.4 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 1.4 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 118, putting it in the top 47% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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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