Why Taiwan Semiconductor Manufacturing Company (TSM) Is Up Today

Update (4:20 p.m. EST): Updated with closing price, day high and low prices, price change and volume information.

NEW YORK (TheStreet) -- Taiwan Semiconductor Manufacturing Company  (TSM) rose 3.36% to $18.15, up 59 cents from its previous close of $17.56, at the close of the trading day on Thursday after the company announced that it expects revenue to recover later this year.

The stock had a volume of 21,262,996, more than double its average of 10,126,600. it hit a high of $18.18 and a low of $17.89 for the day.

Taiwan Semi, the world's largest contract chip maker by market share, said it expects revenue to slip further in the first-quarter, before rebound later this year. The company expects new capacity to come online and for smartphones and tablets manufacturers to get more aggressive in replenishing inventories before product releases.

The company plans to post revenue of $4.51 to $4.57 billion (136 billion to 138 billion New Taiwan dollars) for the first-quarter that ends on March 31. Analysts surveyed by Thomson Reuters expect first-quarter revenue of approximately $4.67 billion.

TSMC reported revenue of nearly $4.85 billion in the fourth-quarter of its latest fiscal year.

TheStreet Ratings team rates TAIWAN SEMICONDUCTOR MFG CO as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate TAIWAN SEMICONDUCTOR MFG CO (TSM) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, good cash flow from operations and growth in earnings per share. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 9.7%. Since the same quarter one year prior, revenues rose by 13.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Although TSM's debt-to-equity ratio of 0.29 is very low, it is currently higher than that of the industry average. To add to this, TSM has a quick ratio of 2.01, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, TAIWAN SEMICONDUCTOR MFG CO's return on equity exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has increased to $3,380.61 million or 25.64% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -11.34%.
  • TAIWAN SEMICONDUCTOR MFG CO's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, TAIWAN SEMICONDUCTOR MFG CO increased its bottom line by earning $1.10 versus $0.86 in the prior year. This year, the market expects an improvement in earnings ($1.20 versus $1.10).
  • You can view the full analysis from the report here: TSM Ratings Report

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