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

Zacks Equity Research

In the latest trading session, TSMC (TSM) closed at $56.15, marking a -0.8% move from the previous day. This move lagged the S&P 500's daily gain of 0.06%. At the same time, the Dow lost 0.15%, and the tech-heavy Nasdaq gained 0.33%.

Wall Street will be looking for positivity from TSM as it approaches its next earnings report date. On that day, TSM is projected to report earnings of $0.73 per share, which would represent year-over-year growth of 78.05%. Our most recent consensus estimate is calling for quarterly revenue of $10.36 billion, up 33.72% from the year-ago period.

TSM's full-year Zacks Consensus Estimates are calling for earnings of $2.80 per share and revenue of $46.17 billion. These results would represent year-over-year changes of +30.23% and +33.31%, respectively.

Investors should also note any recent changes to analyst estimates for TSM. These recent revisions tend to reflect the evolving nature of short-term business trends. 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. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an 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. The Zacks Consensus EPS estimate has moved 0.18% higher within the past month. TSM is currently sporting a Zacks Rank of #2 (Buy).

In terms of valuation, TSM is currently trading at a Forward P/E ratio of 20.21. Its industry sports an average Forward P/E of 20.21, so we one might conclude that TSM is trading at a no noticeable deviation comparatively.

Meanwhile, TSM's PEG ratio is currently 1.21. 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 1.21 as of yesterday's close.

The Semiconductor - Circuit Foundry industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 4, which puts it in the top 2% 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.

To follow TSM in the coming trading sessions, be sure to utilize Zacks.com.


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