With big banks kicking off the Q4 earnings season this week, Wall Street will also be closely watching Taiwan Semiconductor’s TSM quarterly results on Thursday, January 16.
As one of the world’s leading semiconductor companies, let’s see if it’s time to buy, sell, or hold stock in TSM as earnings approach.
TSM Q4 Expectations
Being the largest global supplier of integrated circuit foundries (ICs), Taiwan Semiconductor’s Q4 sales are thought to have increased 34% to $26.38 billion versus $19.62 billion in the comparative quarter.
On the bottom line, Q4 EPS is expected to spike 50% to $2.16 compared to $1.44 per share a year ago. Notably, Taiwan Semiconductor has posted an average EPS surprise of 7.9% in its last four quarterly reports.
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Outlook & EPS Revisions
Taiwan Semiconductor’s total sales are now expected to increase 29% as the company rounds out fiscal 2024 and are projected to expand another 25% in FY25 to $111.33 billion.
Annual earnings are slated to spike 33% to $6.92 per share compared to EPS of $5.18 in FY23. Plus, FY25 EPS is projected to rise another 27% to $8.81. However, it’s noteworthy that FY24 and FY25 EPS estimates have trended lower over the last two months after dipping in the last 30 days.
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TSM Performance & Valuation
TSM has soared over +100% in the last year to impressively top the broader indexes and one of its major competitors Qualcomm QCOM, while being closer to Nvidia’s NVDA gains of +141%.
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Trading over $200 a share, TSM is at a 22.6X forward earnings multiple. This is near the benchmark S&P 500 and nicely beneath Nvidia’s 44.8X but above Qualcomm’s 14.3X.
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Takeaway
Undoubtedly, Taiwan Semiconductor is one the most appealing long-term growth prospects in the tech sector. That said, it may be time to take profits in TSM given the decline in earnings estimate revisions. Correlating with such, TSM lands a Zacks Rank #4 (Sell) as strong Q4 results will be needed to reconfirm Taiwan Semiconductor’s attractive outlook after such an extensive rally in its stock.
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Taiwan Semiconductor Manufacturing Company Ltd. (TSM) : Free Stock Analysis Report
QUALCOMM Incorporated (QCOM) : Free Stock Analysis Report
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
