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Taiwan Semiconductor Q3 Preview: Can Shares Find New Life?
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Semiconductors, also called microchips, are a highlight of technology.
They exist in almost every aspect of our lives. From freezers to computers, they allow the devices we rely on daily to work smoothly and efficiently.
Taiwan Semiconductor Manufacturing (TSM - Free Report) , the world’s largest circuit foundry, is on deck to report quarterly results this week. TSM is a Zacks Rank #4 (Sell) with an overall VGM Score of an A.
How does the company stack up heading into its print? Let’s take a closer look.
Share Performance
TSM shares have struggled notably in 2022, down more than 40% and widely lagging behind the S&P 500.
Image Source: Zacks Investment Research
Over the last three months, the downward trajectory has continued, with shares losing more than 14% in value and lagging behind the S&P 500 in this timeframe also.
Image Source: Zacks Investment Research
Sellers have been in control of TSM shares all year, no different than the majority of the market.
Valuation
TSM shares seem reasonably priced; the company’s 11.2X forward earnings multiple is well beneath its 19.9X five-year median and represents a sizable 45% discount relative to its Zacks Computer and Technology sector average of 20.5X.
Image Source: Zacks Investment Research
Quarterly Estimates
A singular analyst has lowered their outlook for the quarter to be reported, with the Consensus Estimate Trend slipping marginally. Still, the Zacks Consensus EPS Estimate of $1.69 reflects a stellar 57% Y/Y uptick in quarterly earnings.
Image Source: Zacks Investment Research
The company’s top line is also in great shape; the Zacks Consensus Sales Estimate of $20.9 billion suggests Y/Y revenue growth of a double-digit 40%.
Quarterly Performance
TSM has a strong earnings track record, exceeding the Zacks Consensus EPS Estimate in seven consecutive quarters. Just in its latest print, TSM penciled in a solid 3.4% bottom line beat.
However, top line results have left some to be desired; TSM has fallen short of revenue estimates in three of its last four quarters. Below is a chart illustrating the company’s revenue on a quarterly basis.
Image Source: Zacks Investment Research
Additionally, it’s worth noting that shares have moved upward following three of the company’s last four quarterly prints.
Putting Everything Together
TSM shares have struggled across multiple timeframes, indicating that sellers have been in complete control.
The sell-off has caused its valuation levels to a potentially attractive spot; shares trade well below their five-year median and Zacks Sector average.
A singular analyst has lowered their outlook for the quarter, but estimates reflect double-digit percentage increases within revenue and earnings.
Further, TSM has consistently exceeded bottom line estimates, but revenue has consistently come in under expectations as of late.
Heading into the print, Taiwan Semiconductor (TSM - Free Report) carries a Zacks Rank #4 (Sell) with an Earnings ESP Score of -3.8%.
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Taiwan Semiconductor Q3 Preview: Can Shares Find New Life?
Semiconductors, also called microchips, are a highlight of technology.
They exist in almost every aspect of our lives. From freezers to computers, they allow the devices we rely on daily to work smoothly and efficiently.
Taiwan Semiconductor Manufacturing (TSM - Free Report) , the world’s largest circuit foundry, is on deck to report quarterly results this week. TSM is a Zacks Rank #4 (Sell) with an overall VGM Score of an A.
How does the company stack up heading into its print? Let’s take a closer look.
Share Performance
TSM shares have struggled notably in 2022, down more than 40% and widely lagging behind the S&P 500.
Image Source: Zacks Investment Research
Over the last three months, the downward trajectory has continued, with shares losing more than 14% in value and lagging behind the S&P 500 in this timeframe also.
Image Source: Zacks Investment Research
Sellers have been in control of TSM shares all year, no different than the majority of the market.
Valuation
TSM shares seem reasonably priced; the company’s 11.2X forward earnings multiple is well beneath its 19.9X five-year median and represents a sizable 45% discount relative to its Zacks Computer and Technology sector average of 20.5X.
Image Source: Zacks Investment Research
Quarterly Estimates
A singular analyst has lowered their outlook for the quarter to be reported, with the Consensus Estimate Trend slipping marginally. Still, the Zacks Consensus EPS Estimate of $1.69 reflects a stellar 57% Y/Y uptick in quarterly earnings.
Image Source: Zacks Investment Research
The company’s top line is also in great shape; the Zacks Consensus Sales Estimate of $20.9 billion suggests Y/Y revenue growth of a double-digit 40%.
Quarterly Performance
TSM has a strong earnings track record, exceeding the Zacks Consensus EPS Estimate in seven consecutive quarters. Just in its latest print, TSM penciled in a solid 3.4% bottom line beat.
However, top line results have left some to be desired; TSM has fallen short of revenue estimates in three of its last four quarters. Below is a chart illustrating the company’s revenue on a quarterly basis.
Image Source: Zacks Investment Research
Additionally, it’s worth noting that shares have moved upward following three of the company’s last four quarterly prints.
Putting Everything Together
TSM shares have struggled across multiple timeframes, indicating that sellers have been in complete control.
The sell-off has caused its valuation levels to a potentially attractive spot; shares trade well below their five-year median and Zacks Sector average.
A singular analyst has lowered their outlook for the quarter, but estimates reflect double-digit percentage increases within revenue and earnings.
Further, TSM has consistently exceeded bottom line estimates, but revenue has consistently come in under expectations as of late.
Heading into the print, Taiwan Semiconductor (TSM - Free Report) carries a Zacks Rank #4 (Sell) with an Earnings ESP Score of -3.8%.