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TSMC (TSM) Surpasses Market Returns: Some Facts Worth Knowing

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TSMC (TSM - Free Report) ended the recent trading session at $246.98, demonstrating a +1.47% change from the preceding day's closing price. The stock outperformed the S&P 500, which registered a daily gain of 0.21%. At the same time, the Dow added 0.25%, and the tech-heavy Nasdaq gained 0.45%.

Shares of the chip company witnessed a gain of 0.65% over the previous month, trailing the performance of the Computer and Technology sector with its gain of 4.48%, and the S&P 500's gain of 3.07%.

The upcoming earnings release of TSMC will be of great interest to investors. The company's upcoming EPS is projected at $2.56, signifying a 31.96% increase compared to the same quarter of the previous year. Alongside, our most recent consensus estimate is anticipating revenue of $32.31 billion, indicating a 37.48% upward movement from the same quarter last year.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $9.83 per share and revenue of $122.4 billion, indicating changes of +39.63% and +35.88%, respectively, compared to the previous year.

It is also important to note the recent changes to analyst estimates for TSMC. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational 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 past month, the Zacks Consensus EPS estimate has moved 0.43% lower. TSMC is currently sporting a Zacks Rank of #3 (Hold).

With respect to valuation, TSMC is currently being traded at a Forward P/E ratio of 24.77. This represents no noticeable deviation compared to its industry average Forward P/E of 24.77.

Investors should also note that TSM has a PEG ratio of 1.16 right now. 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. As the market closed yesterday, the Semiconductor - Circuit Foundry industry was having an average PEG ratio of 1.16.

The Semiconductor - Circuit Foundry industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 97, this industry ranks in the top 40% of all industries, numbering over 250.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.


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