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TSMC (TSM) Falls More Steeply Than Broader Market: What Investors Need to Know

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TSMC (TSM - Free Report) closed the latest trading day at $138.84, indicating a -0.99% change from the previous session's end. This change lagged the S&P 500's daily loss of 0.28%. On the other hand, the Dow registered a loss of 0.08%, and the technology-centric Nasdaq decreased by 0.42%.

The the stock of chip company has risen by 7.34% in the past month, leading the Computer and Technology sector's gain of 3.64% and the S&P 500's gain of 2.67%.

Analysts and investors alike will be keeping a close eye on the performance of TSMC in its upcoming earnings disclosure. In that report, analysts expect TSMC to post earnings of $1.29 per share. This would mark a year-over-year decline of 1.53%. At the same time, our most recent consensus estimate is projecting a revenue of $18.38 billion, reflecting a 9.96% rise from the equivalent quarter last year.

For the annual period, the Zacks Consensus Estimates anticipate earnings of $6.19 per share and a revenue of $85.41 billion, signifying shifts of +19.5% and +23.24%, respectively, from the last year.

Furthermore, it would be beneficial for investors to monitor any recent shifts in analyst projections for TSMC. These recent revisions tend to reflect the evolving nature of short-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.

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, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 0.2% increase. TSMC is currently sporting a Zacks Rank of #2 (Buy).

Looking at valuation, TSMC is presently trading at a Forward P/E ratio of 22.67. This indicates no noticeable deviation in contrast to its industry's Forward P/E of 22.67.

It is also worth noting that TSM currently has a PEG ratio of 1.07. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. As the market closed yesterday, the Semiconductor - Circuit Foundry industry was having an average PEG ratio of 1.07.

The Semiconductor - Circuit Foundry industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 2, this industry ranks in the top 1% of all industries, numbering over 250.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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