Taiwan Semiconductor Manufacturing Co Ltd (TSM) stock analysis

P/E against its history

Not enough price and earnings history to compare.

P/E against the industry

Needs positive earnings and enough profitable companies in the industry.

EV/EBITDA against its history

Needs positive EBITDA and price history.

P/B against the industry

Needs positive book value.

Price against fair value

We could not estimate a fair value: it needs at least two valuation methods with positive inputs.

Margin of safety

Depends on the fair value estimate.

Revenue growing 10%+ a year

Revenue grew 18.9% a year over the last three fiscal years.

EPS growing 10%+ a year

Diluted EPS grew 19.6% a year over the last three fiscal years.

Earnings growth accelerating

Net income grew 46.5% over the last twelve months, against a 5-year average of 27.2% a year.

Growing faster than the industry

Revenue grew 31.6% over the last twelve months; the Electronic Components and Accessories median is 17.3%.

Guidance issued

The latest outlook (first quarter 2026 Revenue, Jan 15, 2026) was issued for the first time, so it neither adds nor takes away points.

Gross margin improving

Gross margin was 59.9% over the last twelve months, against 56.1% a year earlier.

Return on equity over 15%

Return on equity was 35.4% over the last twelve months and averaged 32.3% over five years.

Return on capital over 10%

Return on invested capital was 64.7%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

Taiwan Semiconductor Manufacturing's return on equity of 35.4% is above the Electronic Components and Accessories median of 4.8%.

Earnings grew over 5 years

Net income grew 27.2% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 44.6% over the last twelve months, against a 5-year average of 41.0%.

Net margin above the industry

Taiwan Semiconductor Manufacturing's net margin of 44.6% is above the Electronic Components and Accessories median of 2.9%.

Low debt

Debt is 3.3% of shareholders' equity, under the 40% we consider low.

Debt falling against equity

Debt to equity fell from 5.1% five years ago to 3.3%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 1287% of total debt.

Interest well covered

Operating income covers interest expense 156.5 times.

Short-term assets cover short-term debts

Current assets are 2.51 times current liabilities.

Bankruptcy risk (Altman Z)

Needs market value, working capital and retained earnings.

No dividend

Taiwan Semiconductor Manufacturing has not paid a dividend in the last twelve months.

Yield against Treasuries

No dividend.

Yield against the market

No dividend.

Dividend stability

No dividend.

Earnings cover

No dividend.

Cash-flow cover

No dividend.