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TSMC (TSM) Laps the Stock Market: Here's Why

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TSMC (TSM - Free Report) closed the most recent trading day at $289.96, moving +1.85% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.69%. On the other hand, the Dow registered a gain of 0.67%, and the technology-centric Nasdaq increased by 0.82%.

The chip company's stock has dropped by 5.59% in the past month, falling short of the Computer and Technology sector's gain of 0.07% and the S&P 500's loss of 0.31%.

The upcoming earnings release of TSMC will be of great interest to investors. The company's upcoming EPS is projected at $2.72, signifying a 21.43% increase compared to the same quarter of the previous year. Meanwhile, the latest consensus estimate predicts the revenue to be $32.6 billion, indicating a 21.26% increase compared to the same quarter of the previous year.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $10.13 per share and a revenue of $120.47 billion, representing changes of +43.89% and +33.73%, respectively, from the prior year.

It's also important for investors to be aware of any recent modifications to analyst estimates for TSMC. These revisions help to show the ever-changing nature of near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable 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. Over the past month, there's been a 0.74% fall in the Zacks Consensus EPS estimate. TSMC is holding a Zacks Rank of #3 (Hold) right now.

Digging into valuation, TSMC currently has a Forward P/E ratio of 28.11. This expresses no noticeable deviation compared to the average Forward P/E of 28.11 of its industry.

Meanwhile, TSM's PEG ratio is currently 0.98. 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 0.98 as of yesterday's close.

The Semiconductor - Circuit Foundry industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 96, placing it within the top 39% of over 250 industries.

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.

Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.


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