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

In the latest trading session, TSMC (TSM) closed at $121.41, marking a -0.53% move from the previous day. This move lagged the S&P 500's daily gain of 0.14%. Meanwhile, the Dow gained 0.25%, and the Nasdaq, a tech-heavy index, lost 0.33%.

Heading into today, shares of the chip company had gained 4.19% over the past month, outpacing the Computer and Technology sector's gain of 2.85% and lagging the S&P 500's gain of 4.32% in that time.

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 $1.15 per share, which would represent year-over-year growth of 18.56%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $16.1 billion, up 27.01% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.16 per share and revenue of $58.66 billion. These totals would mark changes of +22.71% and +28.92%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for TSMC. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. TSMC is currently sporting a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that TSMC has a Forward P/E ratio of 29.34 right now. For comparison, its industry has an average Forward P/E of 29.34, which means TSMC is trading at a no noticeable deviation to the group.

Meanwhile, TSM's PEG ratio is currently 1.83. 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. The Semiconductor - Circuit Foundry industry currently had an average PEG ratio of 1.83 as of yesterday's close.

The Semiconductor - Circuit Foundry industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 114, putting it in the top 45% 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.

To follow TSM in the coming trading sessions, be sure to utilize Zacks.com.

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