2026년 2월 7일 · Unknown · financial · 출처 Yahoo Finance
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If you are wondering whether Taiwan Semiconductor Manufacturing is still reasonably priced after its run, this article will walk through how the current share price lines up against several valuation checks. The stock most recently closed at US$330.73, with a 7 day return of 2.6% decline, a 30 day return of 1.0%, a year to date return of 3.5% and a 1 year return of 58.8%. Recent share price moves have been shaped by ongoing interest in semiconductor capacity and global chip supply, alongside headlines that keep Taiwan Semiconductor Manufacturing in the conversation as a key contract manufacturer for major chip designers. These themes help frame why investors are paying close attention to what counts as a fair price for the business today. On our checklist of 6 valuation tests, Taiwan Semiconductor Manufacturing scores 3 out of 6 on being undervalued, giving it a value score of 3. Next, we will compare different valuation approaches before finishing with a way to interpret these numbers more effectively.
Taiwan Semiconductor Manufacturing delivered 58.8% returns over the last year. See how this stacks up to the rest of the Semiconductor industry.
Approach 1: Taiwan Semiconductor Manufacturing Discounted Cash Flow (DCF) Analysis
A Discounted Cash Flow, or DCF, model projects the cash Taiwan Semiconductor Manufacturing could generate in the future and then discounts those cash flows back into today’s money to arrive at an estimate of what the business might be worth per share.
Simply Wall St uses a 2 Stage Free Cash Flow to Equity model here, based on cash flow projections. The latest twelve month free cash flow is NT$900,193.91m, and analyst and extrapolated estimates point to free cash flow of around NT$3,695,215.77m in 2035. The 10 year path between those two points combines analyst inputs for the earlier years with mechanically extrapolated growth rates in later years.
Bringing all those projected cash flows back to today and dividing by the number of shares gives an estimated intrinsic value of US$232.47 per share. Compared to the recent share price of US$330.73, the model indicates the stock is about 42.3% overvalued on this DCF view.
Result: OVERVALUED
Our Discounted Cash Flow (DCF) analysis suggests Taiwan Semiconductor Manufacturing may be overvalued by 42.3%. Discover 55 high quality undervalued stocks or create your own screener to find better value opportunities.TSM Discounted Cash Flow as at Feb 2026
Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Taiwan Semiconductor Manufacturing.
Story Continues
Approach 2: Taiwan Semiconductor Manufacturing Price vs Earnings
For a profitable company like Taiwan Semiconductor Manufacturing, the P/E ratio is a useful check because it links what you pay per share directly to the earnings the business is generating today.
What counts as a "normal" P/E ratio often reflects how the market views a company’s growth potential and risk. Higher expected growth or lower perceived risk can justify a higher multiple, while slower growth or higher risk can pull that multiple down.
Taiwan Semiconductor Manufacturing currently trades on a P/E of 26.6x. That is below the Semiconductor industry average of 40.6x and below the peer average of 53.9x. Simply Wall St’s Fair Ratio for the stock is 40.4x, which is a proprietary estimate of what the P/E might be given factors such as earnings growth, profit margins, industry, market cap and specific risks.
This Fair Ratio is more tailored than a simple comparison with peers or the broad industry, because it tries to adjust for the company’s own growth profile and risk characteristics rather than assuming all chip makers deserve the same multiple. With the current P/E of 26.6x sitting well below the 40.4x Fair Ratio, the shares screen as undervalued on this measure.
Result: UNDERVALUEDNYSE:TSM P/E Ratio as at Feb 2026
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Upgrade Your Decision Making: Choose your Taiwan Semiconductor Manufacturing Narrative
Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, which are simply your own story about a company, linked directly to your assumptions for fair value, future revenue, earnings and margins.
Instead of only looking at ratios like the P/E, a Narrative helps you connect Taiwan Semiconductor Manufacturing’s business story to a clear financial forecast and then to an estimated fair value per share, so every opinion you have about the company is tied to numbers.
On Simply Wall St, Narratives sit inside the Community page and are designed to be easy to use. This allows you to see how different fair value estimates compare with the current price and to use that gap as one input when deciding whether you want to buy, hold or sell.
Because Narratives are updated when fresh information comes in, such as new earnings or major news, you can watch how the community view shifts over time. For example, one Taiwan Semiconductor Manufacturing Narrative may assume a relatively high fair value and strong margins, while another prices in more modest revenue growth and a lower fair value, giving you a clear range of perspectives to consider.
Do you think there's more to the story for Taiwan Semiconductor Manufacturing? Head over to our Community to see what others are saying!NYSE:TSM 1-Year Stock Price Chart
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your …