TSMC (TSM) Ascends While Market Falls: Some Facts to Note

TSMC (TSM) ended the recent trading session at $343.25, demonstrating a +1.42% change from the preceding day's closing price. The stock outperformed the S&P 500, which registered a daily loss of 0.37%. Elsewhere, the Dow saw a downswing of 0.18%, while the tech-heavy Nasdaq depreciated by 0.84%.

Shares of the chip company have depreciated by 8.54% over the course of the past month, underperforming the Computer and Technology sector's loss of 2.83%, and the S&P 500's loss of 3.7%.

Market participants will be closely following the financial results of TSMC in its upcoming release. On that day, TSMC is projected to report earnings of $3.27 per share, which would represent year-over-year growth of 54.25%. Meanwhile, the latest consensus estimate predicts the revenue to be $35.4 billion, indicating a 38.67% increase compared to the same quarter of the previous year.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $14.37 per share and revenue of $160 billion. These totals would mark changes of +34.93% and +30.69%, respectively, from last year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for TSMC. Such recent modifications usually signify the changing landscape of near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.

Our research suggests that these changes in estimates have a direct relationship with upcoming 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.

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 shifted 1.63% upward. As of now, TSMC holds a Zacks Rank of #3 (Hold).

Digging into valuation, TSMC currently has a Forward P/E ratio of 23.56. Its industry sports an average Forward P/E of 23.56, so one might conclude that TSMC is trading at no noticeable deviation comparatively.

Meanwhile, TSM's PEG ratio is currently 0.93. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The Semiconductor - Circuit Foundry was holding an average PEG ratio of 0.93 at yesterday's closing price.

The Semiconductor - Circuit Foundry industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 94, positioning it in the top 39% of all 250+ industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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

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