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TSMC (TSM) Beats Stock Market Upswing: What Investors Need to Know

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In the latest trading session, TSMC (TSM - Free Report) closed at $232.99, marking a +2.49% move from the previous day. The stock exceeded the S&P 500, which registered a gain of 1.52% for the day. At the same time, the Dow added 1.89%, and the tech-heavy Nasdaq gained 1.88%.

Shares of the chip company witnessed a loss of 5.91% over the previous month, trailing the performance of the Computer and Technology sector with its loss of 0.05%, and the S&P 500's gain of 1.1%.

The investment community will be closely monitoring the performance of TSMC in its forthcoming earnings report. The company is forecasted to report an EPS of $2.56, showcasing a 31.96% upward movement from the corresponding quarter of the prior year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $32.31 billion, up 37.48% from the year-ago period.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $9.83 per share and revenue of $122.4 billion. These totals would mark changes of +39.63% and +35.88%, respectively, from last year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for TSMC. These latest adjustments often mirror the shifting dynamics of short-term business patterns. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.43% lower. As of now, TSMC holds a Zacks Rank of #3 (Hold).

Looking at its valuation, TSMC is holding a Forward P/E ratio of 23.14. Its industry sports an average Forward P/E of 23.14, so one might conclude that TSMC is trading at no noticeable deviation comparatively.

We can also see that TSM currently has a PEG ratio of 1.08. 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. The average PEG ratio for the Semiconductor - Circuit Foundry industry stood at 1.08 at the close of the market yesterday.

The Semiconductor - Circuit Foundry industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 99, putting it in the top 41% 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.

Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.


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