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

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TSMC (TSM - Free Report) closed at $119.14 in the latest trading session, marking a -0.16% move from the prior day. This change lagged the S&P 500's daily gain of 1.17%. At the same time, the Dow added 1.87%, and the tech-heavy Nasdaq gained 0.62%.

Heading into today, shares of the chip company had gained 1.3% over the past month, outpacing the Computer and Technology sector's loss of 3.09% and the S&P 500's loss of 2.46% in that time.

TSMC will be looking to display strength as it nears its next earnings release. In that report, analysts expect TSMC to post earnings of $1.15 per share. This would mark year-over-year growth of 18.56%. Meanwhile, our latest consensus estimate is calling for revenue of $16.1 billion, up 27.01% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $4.16 per share and revenue of $58.66 billion, which would represent changes of +22.71% and +28.92%, respectively, from the prior year.

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

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.

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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. TSMC is holding a Zacks Rank of #3 (Hold) right now.

Looking at its valuation, TSMC is holding a Forward P/E ratio of 28.68. This valuation marks a no noticeable deviation compared to its industry's average Forward P/E of 28.68.

It is also worth noting that TSM currently has a PEG ratio of 1.79. 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. TSM's industry had an average PEG ratio of 1.79 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 108, putting it in the top 43% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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