TSMC (TSM) Exceeds Market Returns: Some Facts to Consider

In the latest trading session, TSMC (TSM) closed at $194.60, reflecting a positive shift of +1.39% from the previous day's closing. This performance surpassed the S&P 500, which saw a daily gain of 0.82%. In contrast, the Dow experienced a decrease of 0.22%, while the tech-heavy Nasdaq saw a notable increase of 1.77%.

Over the past month, TSMC's stock has increased by 0.09%. However, this growth is somewhat behind the performance of the Computer and Technology sector, which recorded gains of 1.43%, as well as the S&P 500, which rose by 0.8% during the same period.

Investors are eagerly awaiting TSMC's upcoming earnings report, with expectations set for earnings per share (EPS) of $2.17. This would represent a significant increase of 50.69% compared to the same quarter last year. Additionally, revenue is anticipated to reach $26.46 billion, indicating an impressive upward movement of 34.86% from the previous year.

For the entire year, the Zacks Consensus Estimates project an EPS of $6.97 and revenues of $89.51 billion, reflecting positive changes of +34.56% for earnings and +29.17% for revenue, respectively, compared to the prior year.

Moreover, it is advisable for investors to stay tuned to any recent updates regarding analyst forecasts for TSMC. Changes in these forecasts can provide insights into the evolving business landscape. Generally, upward revisions signal optimism from analysts regarding the company’s potential to generate profits.

Research indicates that these estimate revisions can directly influence near-term stock movements. To leverage this trend, the Zacks Rank system has been developed, which provides a clear rating model based on these estimate changes. The system ranks stocks from #1 (Strong Buy) to #5 (Strong Sell), with a history that shows #1 ranked stocks yielding an average annual return of +25% since 1988.

In the last 30 days, the Zacks Consensus EPS estimate for TSMC has risen by 1.84%. Currently, TSMC holds a Zacks Rank of #1 (Strong Buy), indicating strong confidence from analysts.

From a valuation perspective, TSMC is trading at a Forward P/E ratio of 27.55, aligning with the industry average Forward P/E of 27.55. This indicates that TSMC is not trading significantly differently than its industry peers.

The company also holds a PEG ratio of 0.88. The PEG ratio, which factors in expected earnings growth, is in line with the industry average of 0.88, implying reasonable valuation when growth is considered.

TSMC is part of the Semiconductor - Circuit Foundry industry, which is categorized under the Computer and Technology sector. The Semiconductor industry ranks highly, holding a Zacks Industry Rank of 1, placing it in the top 1% of over 250 industries evaluated.

The Zacks Industry Rank scores industries based on the average Zacks Rank of the stocks within them. Historically, industries ranked in the top half outperform those in the bottom half twofold.

To keep up with TSMC’s performance in upcoming trading sessions, investors can turn to various financial resources for insights and analysis.

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