Taiwan Semiconductor Stock Analysis, Valuation (NYSE:TSM)

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$38.42 $0.54 (1.39%) TSM stock closing price May 18, 2018 (Closing)
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Taiwan Semiconductor
Updated on : May 18, 2018
previous close
TSM 38.4 (0%)
NASDAQ 7354.3 (0%)
Closing Price On: May 18, 2018
stock rating
RATING: ★★★★★★★★★★ (0/5)
Industry :
Semiconductor fabricator foundries
Sector :
Computer and Technology
5 Quarter Revenue
Revenue Growth
2018-Q1
$billion
%
YOY GROWTH
Compared to the industry
Operating Profit
Operating Margin:
40.1%
Sector Average:
5.4%
5 Quarter Net Profit
Net Margins
2018-Q1
%
LTM Margin
Compared to the industry
Debt/Equity Ratio
Debt:
6.48B
Debt/Equity Ratio:
 0.12
Compared to the industry
Cash Flow
Operating cash flow:
$5.5B
Net Income:
$3.06B
Dividend Yield
TSM dividend yield:
2.39%
PROS      CONS
Operating Margins
Net Margins
Low Debt Burden
Cash Flow
ROIC
ROE
PS Valuation
Rating: ★★★★★★★★★★ (0/5)
Relative Valuation
TSM PS :
6
Industry PS :
2.9
Sector:   Computer and Technology.   *PE adjusted for one time items.
Other Metrics
Return on Invested Capital:
32.5%
Return on Equity:
23.5%
Free Cash Flow Margin:
36%
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Taiwan Semiconductor Stock Analysis

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Take a look at Amigobulls Taiwan Semiconductor stock analysis video. Our TSM analysis video highlights revenue and profit trends along with other important metrics such as valuation to find what makes the stock attractive.

Note: Amigobulls stock rating is our opinion based on the historical performance of the company's fundamentals. It is not indicative of the future performance of the stock.

Taiwan Semiconductor Mfg. Co. Ltd. (ADR) Stock Rating 4/5

We at Amigobulls use various financial measures including profit margins, revenue growth and dividends for TSM stock analysis. Taiwan Semiconductor valuation analysis is based on relative valuation multiples like PE ratio and price to sales ratio. Taiwan Semiconductor stock rating encapsulates our opinion about the company based on the fundamentals.

Should you buy TSM stock?

  • The TTM operating margin was good at 40.1% for Taiwan Semiconductor.
  • Net margins stood at a healthy 34.8% (average) for Taiwan Semiconductor in the Trailing Twelve Months.
  • Taiwan Semiconductor has a lower debt burden than its peers in the Computer and Technology sector, with a debt/equity ratio of  0.12.
  • The company has an operating cash flow which is 1.8 times the net income. We see this as a positive signal.
  • TSM stock is trading at an earnings multiple of 17.3 which is better than the industry average of 25.1.
  • Taiwan Semiconductor's return on invested capital of 32.5% is good.
  • Return On Equity (ROE) which is a measure of the company's profitability, looks great for Taiwan Semiconductor at 23.5%.
  • Taiwan Semiconductor has a healthy FCF (Free Cash Flow) margin of 36%.

Should you sell TSM stock?

  • TSM stock is trading at a PS multiple of 6, which is a negative when compared to the Semiconductor fabricator foundries industry average multiple of 2.9.

Comments on this video and Taiwan Semiconductor stock

Investors can make use of the Amigobulls Taiwan Semiconductor stock analysis to ascertain how TSM stock fares in fundamental analysis investment criteria. Fundamental analysis of a company is the most often used approach to find the intrinsic value of a stock.

Among the financials of the company, Taiwan Semiconductor revenue growth along with the profit or net income give a clear picture of the financial health. One can also combine technical analysis and fundamental analysis to get a holistic picture about TSM stock.