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TSMC (TSM) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

TSMC (TSM) closed at $56 in the latest trading session, marking a +1.74% move from the prior day. This move outpaced the S&P 500's daily gain of 1.31%. Meanwhile, the Dow gained 1.9%, and the Nasdaq, a tech-heavy index, added 1.01%.

TSM will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $0.73, up 78.05% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $10.36 billion, up 33.72% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $2.80 per share and revenue of $46.17 billion, which would represent changes of +30.23% and +33.31%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for TSM. 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.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.36% higher. TSM is currently sporting a Zacks Rank of #1 (Strong Buy).

In terms of valuation, TSM is currently trading at a Forward P/E ratio of 19.66. This valuation marks a no noticeable deviation compared to its industry's average Forward P/E of 19.66.

It is also worth noting that TSM currently has a PEG ratio of 1.18. 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. TSM's industry had an average PEG ratio of 1.18 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 1, putting it in the top 1% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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