Taiwan Semiconductor Manufacturing (TSM:NYE) Fundamental analysis is bullish

Cowen maintains the TSM stock price target at $100.

Based on the TSM stock forecast from 5 analysts, the average analyst TSM stock price target is USD 94.00 over the next 12 months. Taiwan Semiconductor Manufacturing’s average analyst rating is Buy. Stock Target Advisor’s own TSM stock forecast is Bullish, which is based on 12 positive signals and 5 negative signals. At the last closing, Taiwan Semiconductor Manufacturing’s stock price was USD 88.48Taiwan Semiconductor Manufacturing’s stock price has changed by +2.16% over the past week, +11.48% over the past month and -24.14% over the last year.

Taiwan Semiconductor Manufacturing Company Limited manufactures, packages, tests, and sells integrated circuits and other semiconductor devices in Taiwan, China, Europe, the Middle East, Africa, Japan, the United States, and internationally. It provides complementary metal oxide silicon wafer fabrication processes to manufacture logic, mixed-signal, radio frequency, and embedded memory semiconductors. The company also offers customer support, account management, and engineering services, as well as manufactures masks. Its products are used in mobile devices, high performance computing, automotive electronics, and internet of things markets. The company was incorporated in 1987 and is headquartered in Hsinchu City, Taiwan.

 

What we like:

High market capitalization:

This is one of the largest entities in its sector and is among the top quartile. Such companies tend to be more stable.

Superior risk adjusted returns:

TSM stock price target has performed well, on a risk adjusted basis, compared to its sector peers (for a hold period of at least 12 months) and is in the top quartile.

Superior total returns:

TSM stock price target has outperformed its sector peers on average annual total returns basis in the past 5 years (for a hold period of at least 12 months) and is in the top quartile.

High dividend returns:

TSM stock price target has outperformed its sector peers on average annual dividend returns basis in the past 5 years (for a hold period of at least 12 months) and is in the top quartile. Is TSM a good stock to buy? Yes, especially if it is outperforming on total return basis, for investors seeking high income yields.

Superior return on equity:

The TSM stock forecast has delivered better return on equity in the most recent 4 quarters than its peers, placing it in the top quartile.

Superior capital utilization:

The TSM stock forecast has delivered better return on invested capital in the most recent 4 quarters than its peers, placing it in the top quartile.

Superior return on assets:

The TSM stock price target has delivered better return on assets in the most recent 4 quarters than its peers, placing it in the top quartile.

Positive cash flow:

The TSM stock forecast had positive total cash flow in the most recent four quarters.

Positive free cash flow:

The TSM stock price target had positive total free cash flow in the most recent four quarters.

Underpriced on free cash flow basis:

TSM stock price target is trading low compared to its peers on a price to free cash flow basis and is in the top quartile. It may be underpriced but do check its financial performance to make sure there is no specific reason.

Superior Revenue Growth:

TSM stock forecast has shown top quartile revenue growth in the previous 5 years compared to its sector.

Superior Dividend Growth:

TSM stock forecast has shown top quartile dividend growth in the previous 5 years compared to its sector.

 

What we don’t like:

High volatility:

The total returns for TSM stock price target are volatile and above median for its sector over the past 5 years. Make sure you have the risk tolerance for investing in such stock.

Overpriced compared to earnings:

TSM stock price target is trading high compared to its peers on a price to earning basis and is above the sector median.

Overpriced compared to book value:

TSM stock price target is trading high compared to its peers median on a price to book value basis.

Overpriced on cashflow basis:

TSM stock price target is trading high compared to its peers on a price to cash flow basis. It is priced above the median for its sectors. Proceed with caution if you are considering to buy.

Highly leveraged:

The company is in the bottom half compared to its sector peers on debt to equity and is highly leveraged. However, do check the TSM stock forecast and look at its sector and management statements. Sometimes this is high because the company is trying to grow aggressively.