Taiwan Semiconductor Manufacturing Co Ltd

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TSM : NYSE : Technology
$30.59 up 0.19 | 0.62%
Today's Range: 30.23 - 30.68
Avg. Daily Volume: 6,421,500
09/30/16 - 4:05 PM ET

Financial Analysis


TAIWAN SEMICONDUCTOR MFG CO's gross profit margin for the second quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. Even though sales increased, the net income has decreased. TAIWAN SEMICONDUCTOR MFG CO has strong liquidity. Currently, the Quick Ratio is 1.96 which shows the ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year, indicating deteriorating cash flow.

During the same period, stockholders' equity ("net worth") has increased by 7.51% from the same quarter last year. The key liquidity measurements indicate that the company is unlikely to face financial difficulties in the near future.

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Income Statement Q2 FY16 Q2 FY15
Net Sales ($mil)6876.386735.7
EBITDA ($mil)4545.174320.16
EBIT ($mil)2831.782530.57
Net Income ($mil)2247.852601.29


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)20728.2617822.24
Total Assets ($mil)56005.3352100.16
Total Debt ($mil)7512.486743.97
Equity ($mil)37133.934539.52


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin74.4373.13
EBITDA Margin66.0964.13
Operating Margin41.1837.57
Sales Turnover0.450.52
Return on Assets15.1418.96
Return on Equity22.8328.6
Debt Q2 FY16 Q2 FY15
Current Ratio2.142.36
Debt/Capital0.170.16
Interest Expense25.4625.67
Interest Coverage111.2298.6


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)5186.085185.72
Div / share0.940.72
EPS0.430.5
Book value / share7.166.66
Institutional Own % n/a n/a
Avg Daily Volume6801941.07011485.0

Valuation


BUY. This stock's P/E ratio indicates a discount compared to an average of 27.99 for the Semiconductors & Semiconductor Equipment industry and a discount compared to the S&P 500 average of 25.19. For additional comparison, its price-to-book ratio of 4.28 indicates a premium versus the S&P 500 average of 2.82 and a premium versus the industry average of 4.16. The price-to-sales ratio is well above both the S&P 500 average and the industry average, indicating a premium.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
TSM 18.81 Peers 27.99   TSM 10.90 Peers 16.13

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

TSM is trading at a significant discount to its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

TSM is trading at a significant discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
TSM 15.72 Peers 18.94   TSM 3.39 Peers 2.65

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

TSM is trading at a discount to its peers.

 

Premium. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

TSM trades at a significant premium to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
TSM 4.28 Peers 4.16   TSM -14.66 Peers -0.00

Average. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

TSM is trading at a valuation on par with its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, TSM is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
TSM 6.34 Peers 4.64   TSM -6.74 Peers 4.90

Premium. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

TSM is trading at a significant premium to its industry.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

TSM significantly trails its peers on the basis of sales growth

 

 

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