Taiwan Semiconductor Manufacturing Co Ltd

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TSM : NYSE : Technology
$27.74 | %
Today's Range: 27.48 - 27.79
Avg. Daily Volume: 7,260,500
07/22/16 - 4:02 PM ET

Financial Analysis


TAIWAN SEMICONDUCTOR MFG CO's gross profit margin for the first quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. Sales and net income have dropped, although the growth in revenues underperformed the average competitor within the industry, the net income growth did not. TAIWAN SEMICONDUCTOR MFG CO is extremely liquid. Currently, the Quick Ratio is 3.16 which clearly shows the ability to cover any 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 10.56% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is very unlikely to face financial difficulties in the near future.

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Income Statement Q1 FY16 Q1 FY15
Net Sales ($mil)6323.667107.37
EBITDA ($mil)3925.84557.68
EBIT ($mil)2190.342781.82
Net Income ($mil)2013.12528.49


Balance Sheet Q1 FY16 Q1 FY15
Cash & Equiv. ($mil)20149.0816612.5
Total Assets ($mil)53652.1349836.59
Total Debt ($mil)7742.27449.81
Equity ($mil)39775.4235974.5


Profitability Q1 FY16 Q1 FY15
Gross Profit Margin70.1272.47
EBITDA Margin62.0864.12
Operating Margin34.6439.14
Sales Turnover0.460.53
Return on Assets16.4618.67
Return on Equity22.2125.87
Debt Q1 FY16 Q1 FY15
Current Ratio3.443.68
Debt/Capital0.160.17
Interest Expense26.4325.41
Interest Coverage82.87109.46


Share Data Q1 FY16 Q1 FY15
Shares outstanding (mil)5186.085186.06
Div / share0.00.0
EPS0.390.49
Book value / share7.676.94
Institutional Own % n/a n/a
Avg Daily Volume7373108.07888401.0

Valuation


BUY. The current P/E ratio indicates a significant discount compared to an average of 34.80 for the Semiconductors & Semiconductor Equipment industry and a discount compared to the S&P 500 average of 25.03. To use another comparison, its price-to-book ratio of 3.53 indicates a premium versus the S&P 500 average of 2.80 and a discount versus the industry average of 3.92. The price-to-sales ratio is well above both the S&P 500 average and the industry average, indicating a premium. Upon assessment of these and other key valuation criteria, TAIWAN SEMICONDUCTOR MFG CO proves to trade at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
TSM 15.95 Peers 34.80   TSM 9.41 Peers 19.55

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 13.62 Peers 18.32   TSM 2.87 Peers 13.85

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.

 

Discount. 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 discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
TSM 3.53 Peers 3.92   TSM -5.56 Peers 1.03

Discount. 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 discount to 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 5.64 Peers 4.55   TSM -5.46 Peers 4.04

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 premium to its industry on this measurement.

 

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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