TSM Relative Valuation
TSM's fair value is calculated using relative valuation, based on historical P/E and P/S ranges and their premiums/discounts relative to a competitor average, adjusted by weights. If the market price exceeds this fair value range, TSM is overvalued; if below, it's undervalued.
Historical Valuation
Taiwan Semiconductor Manufacturing Co Ltd (TSM) is now in the Fair zone, suggesting that its current forward PE ratio of 22.56 is considered Fairly compared with the five-year average of 18.54. The fair price of Taiwan Semiconductor Manufacturing Co Ltd (TSM) is between 255.45 to 350.61 according to relative valuation methord.
Relative Value
Fair Zone
255.45-350.61
Current Price：327.43
Fair
22.56
PE
1Y
3Y
5Y
13.03
EV/EBITDA
Taiwan Semiconductor Manufacturing Co Ltd. (TSM) has a current EV/EBITDA of 13.03. The 5-year average EV/EBITDA is 10.24. The thresholds are as follows: Strongly Undervalued below 6.01, Undervalued between 6.01 and 8.13, Fairly Valued between 12.35 and 8.13, Overvalued between 12.35 and 14.47, and Strongly Overvalued above 14.47. The current Forward EV/EBITDA of 13.03 falls within the Overvalued range.
18.16
EV/EBIT
Taiwan Semiconductor Manufacturing Co Ltd. (TSM) has a current EV/EBIT of 18.16. The 5-year average EV/EBIT is 15.86. The thresholds are as follows: Strongly Undervalued below 8.50, Undervalued between 8.50 and 12.18, Fairly Valued between 19.54 and 12.18, Overvalued between 19.54 and 23.22, and Strongly Overvalued above 23.22. The current Forward EV/EBIT of 18.16 falls within the Historic Trend Line -Fairly Valued range.
9.47
PS
Taiwan Semiconductor Manufacturing Co Ltd. (TSM) has a current PS of 9.47. The 5-year average PS is 7.26. The thresholds are as follows: Strongly Undervalued below 4.40, Undervalued between 4.40 and 5.83, Fairly Valued between 8.69 and 5.83, Overvalued between 8.69 and 10.12, and Strongly Overvalued above 10.12. The current Forward PS of 9.47 falls within the Overvalued range.
17.62
P/OCF
Taiwan Semiconductor Manufacturing Co Ltd. (TSM) has a current P/OCF of 17.62. The 5-year average P/OCF is 12.18. The thresholds are as follows: Strongly Undervalued below 7.20, Undervalued between 7.20 and 9.69, Fairly Valued between 14.66 and 9.69, Overvalued between 14.66 and 17.15, and Strongly Overvalued above 17.15. The current Forward P/OCF of 17.62 falls within the Strongly Overvalued range.
50.10
P/FCF
Taiwan Semiconductor Manufacturing Co Ltd. (TSM) has a current P/FCF of 50.10. The 5-year average P/FCF is 53.97. The thresholds are as follows: Strongly Undervalued below -22.87, Undervalued between -22.87 and 15.55, Fairly Valued between 92.40 and 15.55, Overvalued between 92.40 and 130.82, and Strongly Overvalued above 130.82. The current Forward P/FCF of 50.10 falls within the Historic Trend Line -Fairly Valued range.
Taiwan Semiconductor Manufacturing Co Ltd (TSM) has a current Price-to-Book (P/B) ratio of 8.66. Compared to its 3-year average P/B ratio of 8.05 , the current P/B ratio is approximately 7.69% higher. Relative to its 5-year average P/B ratio of 7.51, the current P/B ratio is about 15.43% higher. Taiwan Semiconductor Manufacturing Co Ltd (TSM) has a Forward Free Cash Flow (FCF) yield of approximately 0.00%. Compared to its 3-year average FCF yield of 2.72%, the current FCF yield is approximately -100.00% lower. Relative to its 5-year average FCF yield of 2.69% , the current FCF yield is about -100.00% lower.
8.66
P/B
Median3y
8.05
Median5y
7.51
2.17
FCF Yield
Median3y
2.72
Median5y
2.69
Competitors Valuation Multiple
The average P/S ratio for TSM's competitors is 11.52, providing a benchmark for relative valuation. Taiwan Semiconductor Manufacturing Co Ltd Corp (TSM) exhibits a P/S ratio of , which is -100% above the industry average. Given its robust revenue growth of 40.49%, this premium appears sustainable.
Performance Decomposition
1Y
3Y
5Y
Market capitalization of TSM increased by 56.43% over the past 1 year. The primary factor behind the change was an increase in Revenue Growth from 23.55B to 33.08B.
The secondary factor is the P/E Change, contributed 9.28%to the performance.
Overall, the performance of TSM in the past 1 year is driven by Revenue Growth. Which is more sustainable.
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Frequently Asked Questions
Is Taiwan Semiconductor Manufacturing Co Ltd (TSM) currently overvalued or undervalued?
Taiwan Semiconductor Manufacturing Co Ltd (TSM) is now in the Fair zone, suggesting that its current forward PE ratio of 22.56 is considered Fairly compared with the five-year average of 18.54. The fair price of Taiwan Semiconductor Manufacturing Co Ltd (TSM) is between 255.45 to 350.61 according to relative valuation methord.
What is Taiwan Semiconductor Manufacturing Co Ltd (TSM) fair value?
TSM's fair value is calculated using relative valuation, based on historical P/E and P/S ranges and their premiums/discounts relative to a competitor average , adjusted by weights. The fair price of Taiwan Semiconductor Manufacturing Co Ltd (TSM) is between 255.45 to 350.61 according to relative valuation methord.
How does TSM's valuation metrics compare to the industry average?
The average P/S ratio for TSM's competitors is 11.52, providing a benchmark for relative valuation. Taiwan Semiconductor Manufacturing Co Ltd Corp (TSM) exhibits a P/S ratio of , which is -100.00% above the industry average. Given its robust revenue growth of 40.49%, this premium appears sustainable.
What is the current P/B ratio for Taiwan Semiconductor Manufacturing Co Ltd (TSM) as of Jan 08 2026?
As of Jan 08 2026, Taiwan Semiconductor Manufacturing Co Ltd (TSM) has a P/B ratio of 8.66. This indicates that the market values TSM at 8.66 times its book value.
What is the current FCF Yield for Taiwan Semiconductor Manufacturing Co Ltd (TSM) as of Jan 08 2026?
As of Jan 08 2026, Taiwan Semiconductor Manufacturing Co Ltd (TSM) has a FCF Yield of 0.00%. This means that for every dollar of Taiwan Semiconductor Manufacturing Co Ltd’s market capitalization, the company generates 0.00 cents in free cash flow.
What is the current Forward P/E ratio for Taiwan Semiconductor Manufacturing Co Ltd (TSM) as of Jan 08 2026?
As of Jan 08 2026, Taiwan Semiconductor Manufacturing Co Ltd (TSM) has a Forward P/E ratio of 22.56. This means the market is willing to pay $22.56 for every dollar of Taiwan Semiconductor Manufacturing Co Ltd’s expected earnings over the next 12 months.
What is the current Forward P/S ratio for Taiwan Semiconductor Manufacturing Co Ltd (TSM) as of Jan 08 2026?
As of Jan 08 2026, Taiwan Semiconductor Manufacturing Co Ltd (TSM) has a Forward P/S ratio of 0.00. This means the market is valuing TSM at $0.00 for every dollar of expected revenue over the next 12 months.