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TSMC (TSM) Gains But Lags Market: What You Should Know

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In the latest trading session, TSMC (TSM - Free Report) closed at $50.27, marking a +1.11% move from the previous day. This move lagged the S&P 500's daily gain of 3.41%. Elsewhere, the Dow gained 3.44%, while the tech-heavy Nasdaq added 2.58%.

Coming into today, shares of the chip company had lost 8.79% in the past month. In that same time, the Computer and Technology sector lost 7.94%, while the S&P 500 lost 10.46%.

TSM will be looking to display strength as it nears its next earnings release, which is expected to be April 16, 2020. On that day, TSM is projected to report earnings of $0.66 per share, which would represent year-over-year growth of 73.68%.

Any recent changes to analyst estimates for TSM should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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 has moved 6.52% lower. TSM is currently sporting a Zacks Rank of #4 (Sell).

In terms of valuation, TSM is currently trading at a Forward P/E ratio of 19.27. For comparison, its industry has an average Forward P/E of 19.27, which means TSM is trading at a no noticeable deviation to the group.

Also, we should mention that TSM has a PEG ratio of 1.48. 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. The Semiconductor - Circuit Foundry industry currently had an average PEG ratio of 1.48 as of yesterday's close.

The Semiconductor - Circuit Foundry industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 241, which puts it in the bottom 6% 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.

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