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TSMC (TSM) Gains But Lags Market: What You Should Know

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In the latest trading session, TSMC (TSM - Free Report) closed at $118.91, marking a +0.41% move from the previous day. This change lagged the S&P 500's 0.75% gain on the day.

Coming into today, shares of the chip company had lost 0.5% in the past month. In that same time, the Computer and Technology sector gained 7.17%, while the S&P 500 gained 3.52%.

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 $0.89 per share, which would represent year-over-year growth of 14.1%. Our most recent consensus estimate is calling for quarterly revenue of $12.96 billion, up 24.83% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $4.11 per share and revenue of $56.56 billion, which would represent changes of +21.24% and +24.29%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for TSM. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.98% higher. TSM currently has a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that TSM has a Forward P/E ratio of 28.93 right now. This valuation marks a no noticeable deviation compared to its industry's average Forward P/E of 28.93.

It is also worth noting that TSM currently has a PEG ratio of 1.82. 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 1.82 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 132, putting it in the bottom 49% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

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


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