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

TSMC (TSM) closed at $316.50 in the latest trading session, marking a -3.13% move from the prior day. The stock fell short of the S&P 500, which registered a loss of 0.4% for the day. Meanwhile, the Dow experienced a rise of 0.11%, and the technology-dominated Nasdaq saw a decrease of 0.73%.

Coming into today, shares of the chip company had lost 12.77% in the past month. In that same time, the Computer and Technology sector lost 8.37%, while the S&P 500 lost 7.34%.

Investors will be eagerly watching for the performance of TSMC in its upcoming earnings disclosure. The company's earnings per share (EPS) are projected to be $3.27, reflecting a 54.25% increase from the same quarter last year. In the meantime, our current consensus estimate forecasts the revenue to be $35.4 billion, indicating a 38.67% growth compared to the corresponding quarter of the prior year.

TSM's full-year Zacks Consensus Estimates are calling for earnings of $14.37 per share and revenue of $160 billion. These results would represent year-over-year changes of +34.93% and +30.69%, respectively.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for TSMC. Recent revisions tend to reflect the latest near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. 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, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the past month, there's been a 1.63% rise in the Zacks Consensus EPS estimate. As of now, TSMC holds a Zacks Rank of #3 (Hold).

Looking at its valuation, TSMC is holding a Forward P/E ratio of 22.74. This denotes no noticeable deviation relative to the industry average Forward P/E of 22.74.

We can additionally observe that TSM currently boasts a PEG ratio of 0.9. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The Semiconductor - Circuit Foundry was holding an average PEG ratio of 0.9 at yesterday's closing price.

The Semiconductor - Circuit Foundry industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 99, placing it within the top 41% of over 250 industries.

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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This article originally published on Zacks Investment Research (zacks.com).

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