In the latest close session, TSMC (TSM) was up +2.23% at $268.64. The stock exceeded the S&P 500, which registered a gain of 0.48% for the day. Elsewhere, the Dow gained 0.27%, while the tech-heavy Nasdaq added 0.94%.
Coming into today, shares of the chip company had gained 14.96% in the past month. In that same time, the Computer and Technology sector gained 5.46%, while the S&P 500 gained 2.46%.
Investors will be eagerly watching for the performance of TSMC in its upcoming earnings disclosure. It is anticipated that the company will report an EPS of $2.56, marking a 31.96% rise compared to the same quarter of the previous year. At the same time, our most recent consensus estimate is projecting a revenue of $32.31 billion, reflecting a 37.48% rise from the equivalent quarter last year.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $9.83 per share and revenue of $122.4 billion. These totals would mark changes of +39.63% and +35.88%, respectively, from last year.
Investors should also pay attention to any latest changes in analyst estimates for TSMC. These recent revisions tend to reflect the evolving nature of short-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. 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. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed an unchanged state. TSMC is currently sporting a Zacks Rank of #4 (Sell).
Looking at valuation, TSMC is presently trading at a Forward P/E ratio of 26.74. This signifies no noticeable deviation in comparison to the average Forward P/E of 26.74 for its industry.
It is also worth noting that TSM currently has a PEG ratio of 1.25. 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 average PEG ratio for the Semiconductor - Circuit Foundry industry stood at 1.25 at the close of the market yesterday.
The Semiconductor - Circuit Foundry industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 233, which puts it in the bottom 6% of all 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.
You can find more information on all of these metrics, and much more, on Zacks.com.
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Taiwan Semiconductor Manufacturing Company Ltd. (TSM): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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