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TSMC (TSM) Outpaces Stock Market Gains: What You Should Know

TSMC (TSM) closed the most recent trading day at $119.28, moving +1.87% from the previous trading session. This move outpaced the S&P 500's daily gain of 1.32%. Elsewhere, the Dow gained 0.68%, while the tech-heavy Nasdaq lost 0.15%.

Prior to today's trading, shares of the chip company had gained 2.98% over the past month. This has outpaced the Computer and Technology sector's gain of 1.76% and lagged the S&P 500's gain of 3.61% in that time.

TSMC will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $1.15, up 18.56% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $16.1 billion, up 27.01% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $4.16 per share and revenue of $58.66 billion, which would represent changes of +22.71% and +28.92%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for TSMC. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. TSMC is holding a Zacks Rank of #3 (Hold) right now.

Digging into valuation, TSMC currently has a Forward P/E ratio of 28.15. For comparison, its industry has an average Forward P/E of 29.02, which means TSMC is trading at a discount to the group.

It is also worth noting that TSM currently has a PEG ratio of 1.75. 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. Semiconductor - Circuit Foundry stocks are, on average, holding a PEG ratio of 1.81 based on yesterday's closing prices.

The Semiconductor - Circuit Foundry industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 110, which puts it in the top 44% of all 250+ industries.

The Zacks Industry Rank includes is listed in order 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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