TSMC (TSM) closed at $190.08 in the latest trading session, marking a -0.61% move from the prior day. The stock trailed the S&P 500, which registered a daily gain of 0.35%. On the other hand, the Dow registered a gain of 0.97%, and the technology-centric Nasdaq increased by 0.17%.
Coming into today, shares of the chip company had lost 3.38% in the past month. In that same time, the Computer and Technology sector gained 0.56%, while the S&P 500 gained 1.69%.
Market participants will be closely following the financial results of TSMC in its upcoming release. The company is expected to report EPS of $2.14, up 48.61% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $25.96 billion, up 32.27% from the year-ago period.
For the full year, the Zacks Consensus Estimates project earnings of $6.95 per share and a revenue of $88.39 billion, demonstrating changes of +34.17% and +27.55%, respectively, from the preceding year.
Investors should also pay attention to any latest changes in analyst estimates for TSMC. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 2.99% higher. At present, TSMC boasts a Zacks Rank of #1 (Strong Buy).
In terms of valuation, TSMC is presently being traded at a Forward P/E ratio of 27.52. This signifies no noticeable deviation in comparison to the average Forward P/E of 27.52 for its industry.
Also, we should mention that TSM has a PEG ratio of 0.88. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The average PEG ratio for the Semiconductor - Circuit Foundry industry stood at 0.88 at the close of the market yesterday.
The Semiconductor - Circuit Foundry industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 1, putting it in the top 1% 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.
You can find more information on all of these metrics, and much more, on Zacks.com.
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