TSMC (TSM) Gains But Lags Market: What You Should Know

TSMC (TSM) closed at $69.25 in the latest trading session, marking a +1.01% move from the prior day. The stock lagged the S&P 500's daily gain of 2.59%. Meanwhile, the Dow gained 2.66%, and the Nasdaq, a tech-heavy index, added 0.07%.

Coming into today, shares of the chip company had lost 15.25% in the past month. In that same time, the Computer and Technology sector lost 11.97%, while the S&P 500 lost 9.22%.

Wall Street will be looking for positivity from TSMC as it approaches its next earnings report date. On that day, TSMC is projected to report earnings of $1.50 per share, which would represent year-over-year growth of 38.89%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $20.83 billion, up 40.03% from the year-ago period.

TSM's full-year Zacks Consensus Estimates are calling for earnings of $6.18 per share and revenue of $77.77 billion. These results would represent year-over-year changes of +50% and +36.87%, respectively.

It is also important to note the recent changes to analyst estimates for TSMC. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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 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 has moved 1.85% lower within the past month. TSMC currently has a Zacks Rank of #4 (Sell).

Investors should also note TSMC's current valuation metrics, including its Forward P/E ratio of 11.09. This valuation marks a no noticeable deviation compared to its industry's average Forward P/E of 11.09.

Also, we should mention that TSM has a PEG ratio of 0.46. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Semiconductor - Circuit Foundry stocks are, on average, holding a PEG ratio of 0.46 based on yesterday's closing prices.

The Semiconductor - Circuit Foundry industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 244, putting it in the bottom 4% 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.

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

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