Taiwan Semiconductor Manufacturing Company shares fell by -2.1% during the day's morning session, and are now trading at a price of $89.57. Is it time to buy the dip? To better answer that question, it's essential to check if the market is valuing the company's shares fairly in terms of its earnings and equity levels.
Taiwan Semiconductor Manufacturing Company Has Attractive Multiples and Trades Below Its Graham Number:
Taiwan Semiconductor Manufacturing Company Limited, together with its subsidiaries, 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 belongs to the Technology sector, which has an average price to earnings (P/E) ratio of 27.16 and an average price to book (P/B) ratio of 6.23. In contrast, Taiwan Semiconductor Manufacturing Company has a trailing 12 month P/E ratio of 15.8 and a P/B ratio of 1.17.
Taiwan Semiconductor Manufacturing Company's PEG ratio is 3.08, which shows that the stock is probably overvalued in terms of its estimated growth. For reference, a PEG ratio near or below 1 is a potential signal that a company is undervalued.
The Company Has a Positive Net Current Asset Value:
| 2021-04-14 | 2022-04-14 | |
|---|---|---|
| Revenue (MM) | $1,339,255 | $1,587,415 |
| Gross Margins | 53.0% | 52.0% |
| Operating Margins | 42% | 41% |
| Net Margins | 38.0% | 37.0% |
| Net Income (MM) | $511,008 | $592,881 |
| Net Interest Expense (MM) | $9,018 | $5,709 |
| Depreciation & Amort. (MM) | -$331,725 | -$422,395 |
| Earnings Per Share | $98.53 | $114.32 |
| EPS Growth | n/a | 16.03% |
| Diluted Shares (MM) | 5,186 | 5,186 |
| Free Cash Flow (MM) | $1,337,796 | $1,959,185 |
| Capital Expenditures (MM) | -$515,130 | -$847,025 |
| Net Current Assets (MM) | $167,349 | $33,453 |
| Long Term Debt (MM) | $256,073 | $613,380 |
| Net Debt / EBITDA | -0.5 | -0.43 |
Taiwan Semiconductor Manufacturing Company has strong margins with a stable trend, an excellent current ratio, and low leverage. However, the firm suffers from slimmer gross margins than its peers and declining EPS growth. Finally, we note that Taiwan Semiconductor Manufacturing Company has weak revenue growth and a flat capital expenditure trend and irregular cash flows.
