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

Zacks Equity Research
·2-min read

TSMC (TSM) closed the most recent trading day at $84.12, moving -0.93% from the previous trading session. This move lagged the S&P 500's daily gain of 0.95%. At the same time, the Dow added 0.64%, and the tech-heavy Nasdaq gained 0.23%.

Heading into today, shares of the chip company had lost 6.08% over the past month, lagging the Computer and Technology sector's loss of 2.82% and the S&P 500's loss of 3.49% in that time.

Investors will be hoping for strength from TSMC as it approaches its next earnings release. On that day, TSMC is projected to report earnings of $1.48 per share, which would represent year-over-year growth of 59.14%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $18.68 billion, up 40.56% from the year-ago period.

TSM's full-year Zacks Consensus Estimates are calling for earnings of $5.93 per share and revenue of $76.53 billion. These results would represent year-over-year changes of +43.93% and +34.68%, respectively.

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Investors might also notice recent changes to analyst estimates for TSMC. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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. Within the past 30 days, our consensus EPS projection remained stagnant. TSMC is currently a Zacks Rank #3 (Hold).

Investors should also note TSMC's current valuation metrics, including its Forward P/E ratio of 14.32. For comparison, its industry has an average Forward P/E of 14.32, which means TSMC is trading at a no noticeable deviation to the group.

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 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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