Financial Analysis Report - Taiwan Semiconductor (TSM)
Introduction
This report aims to provide a comprehensive analysis of Taiwan Semiconductor (TSM) as an investment opportunity. The analysis will cover various aspects of the company, including recent news developments, financial performance, balance sheet strength, income statement trends, and cash flow analysis. The report will conclude with an overall viewpoint on the investment potential of TSM.
Recent News Developments
To begin the analysis, let's review some recent news developments related to Taiwan Semiconductor:
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Taiwan Semiconductor Stock (NYSE:TSM), Quotes and News Summary - This news article from Benzinga provides a summary of the latest price target set by Barclays for TSM. While the specific price target is not mentioned, it indicates that analysts are actively following the stock and providing price targets.
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TSM, CRM, GOOGL: The Top 3 Stocks to Buy in 2024 - According to InvestorPlace, TSM is listed as one of the top three stocks to buy in 2024. This suggests that the company is considered a strong investment opportunity in the current market.
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TSM finally reveal when they’re returning to pro League of Legends - Dexerto reports that TSM has announced its return to the professional League of Legends scene. This news highlights the company's involvement in the esports industry, which could have potential growth opportunities.
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Final Trade: WMT, GM, META, TSM - CNBC's Final Trade segment mentions TSM as one of the stocks discussed by market experts. This indicates that TSM is actively traded and followed by investors.
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Franklin Park Beats Selmaville For St Peter Title, TSM 3rd - Southern Illinois Now reports on a local sports event where TSM finishes third. While this news is not directly related to the company's financial performance, it highlights TSM's involvement in community events.
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TSM: Chip Trio: 3 Stocks to Watch for Weekly Profits - StockNews.com mentions TSM as one of the three stocks to watch for weekly profits. This suggests that TSM's stock performance is being closely monitored by traders.
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Will TSM return to COD Esports as the CDL suffers? - Esports.net discusses TSM's potential return to the Call of Duty esports space. This news highlights TSM's diversification into different segments of the gaming industry.
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Taiwan Semiconductor Mfg. Co. Ltd. (TSM) has gained 1.16% Friday In Premarket Trading - InvestorsObserver reports a 1.16% gain in TSM's stock price during premarket trading. This indicates positive market sentiment towards the company.
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TSMC: Beijing Is A Threat (NYSE:TSM) - Seeking Alpha discusses the potential threat posed by Beijing to TSM. This news highlights the geopolitical risks associated with the company's operations.
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When (TSM) Moves Investors should Listen - Stock Traders Daily mentions TSM and emphasizes the importance of paying attention to the company's movements. This suggests that TSM's stock price movements can have a significant impact on investors.
Financial Performance
To assess the financial performance of Taiwan Semiconductor, we will analyze the company's latest four quarterly balance sheet, income statement, and cash flow data.
Balance Sheet Analysis
The balance sheet provides insights into the company's financial health, liquidity, and capital structure. Let's review the key balance sheet metrics for TSM:
| Metric | Q3 2023 | Q2 2023 | Q1 2023 | Q4 2022 | Annual 2022 |
|---|---|---|---|---|---|
| Total Current Liabilities | $30,050,179,396 | $26,034,420,427 | $28,675,258,100 | $30,721,049,503 | $30,721,049,503 |
| Total Long-term Debt | $29,953,309,211 | $30,087,369,198 | $29,058,872,617 | $28,268,958,794 | $28,268,958,794 |
| Total Debt | $30,269,144,716 | $30,432,976,256 | $29,409,883,439 | $28,982,055,799 | $28,982,055,799 |
| Total Shareholder Equity | $103,726,974,449 | $102,385,668,577 | $101,099,727,662 | $95,838,792,113 | $95,838,792,113 |
| Total Assets | $169,903,080,219 | $165,341,072,902 | $165,722,780,130 | $161,532,393,421 | $161,532,393,421 |
| Cash and Short-term Investments | $48,060,389,430 | $47,843,222,238 | $52,198,243,468 | $50,808,100,763 | $50,808,100,763 |
| Goodwill and Intangible Assets | $911,240,656 | $953,567,307 | $986,916,693 | $1,034,340,616 | $1,034,340,616 |
From the balance sheet analysis, we can observe the following trends:
- Total current liabilities have been increasing over the past four quarters, indicating potential short-term obligations that need to be managed.
- Total long-term debt has remained relatively stable, suggesting a consistent capital structure.
- Total shareholder equity has shown a gradual increase, indicating a positive trend in the company's net worth.
- Total assets have also increased steadily, reflecting the company's growth and expansion.
- Cash and short-term investments have remained at a high level, providing the company with liquidity and financial flexibility.
- Goodwill and intangible assets have shown a slight increase, indicating potential investments in intellectual property and brand value.
Income Statement Analysis
The income statement provides insights into the company's revenue, expenses, and profitability. Let's review the key income statement metrics for TSM:
| Metric | Q3 2023 | Q2 2023 | Q1 2023 | Q4 2022 | Annual 2022 |
|---|---|---|---|---|---|
| Total Revenue | $17,247,877,006 | $15,653,980,957 | $16,728,841,393 | $19,945,679,068 | $75,936,463,750 |
| Gross Profit | $9,093,110,664 | $8,203,719,620 | $9,162,410,233 | $12,161,792,883 | $44,169,556,542 |
| Operating Income | $7,190,643,274 | $6,576,327,096 | $7,603,758,133 | $10,351,648,788 | $37,622,497,990 |
| Net Income | $6,656,453,163 | $5,918,540,452 | $6,807,748,481 | $9,435,186,361 | $34,096,916,525 |
| Earnings per Share (EPS) | $1.284 | $1.141 | $1.312 | $1.819 | $6.574 |
| Profit Margin | 38.59% | 37.81% | 40.69% | 47.30% | 44.90% |
From the income statement analysis, we can observe the following trends:
- Total revenue has shown some fluctuations over the past four quarters, but the annual revenue for 2022 indicates a significant growth trajectory.
- Gross profit has remained relatively stable, indicating efficient cost management and pricing strategies.
- Operating income has followed a similar trend to gross profit, suggesting effective operational efficiency.
- Net income has shown a consistent increase, indicating strong profitability and financial performance.
- Earnings per share (EPS) have also increased steadily, reflecting the company's ability to generate returns for shareholders.
- Profit margin has remained consistently high, indicating a healthy level of profitability.
Cash Flow Analysis
The cash flow statement provides insights into the company's cash generation, operating activities, and investment activities. Let's review the key cash flow metrics for TSM:
| Metric | Q3 2023 | Q2 2023 | Q1 2023 | Q4 2022 | Annual 2022 |
|---|---|---|---|---|---|
| Cash Flow from Operating Activities | $9,717,446,814 | $5,731,670,984 | $12,994,246,950 | $15,437,574,027 | $54,366,781,879 |
| Cash Flow from Investing Activities | ($7,121,687,165) | ($8,147,500,832) | ($9,949,798,512) | ($10,718,467,037) | ($36,315,477,357) |
| Cash Flow from Financing Activities | ($2,252,571,026) | ($2,321,356,662) | ($2,345,324,466) | ($2,225,468,018) | ($9,567,453,802) |
| Free Cash Flow | $2,595,759,650 | ($2,415,829,848) | $3,044,448,437 | $4,719,106,990 | $18,051,304,522 |
| Net Change in Cash | $406,377,390 | $409,935,617 | $454,957,815 | $436,893,521 | $436,893,521 |
From the cash flow analysis, we can observe the following trends:
- Cash flow from operating activities has shown a significant increase in Q3 2023 compared to the previous quarters, indicating strong cash generation from core operations.
- Cash flow from investing activities has been negative, indicating investments in property, plant, and equipment.
- Cash flow from financing activities has also been negative, suggesting debt repayments and dividend payments.
- Free cash flow has shown some fluctuations but remains positive overall, indicating the company's ability to generate cash after accounting for capital expenditures.
- The net change in cash has remained relatively stable, reflecting the company's ability to maintain a healthy cash position.
Valuation and Financial Insights
Based on the analysis of TSM's financial performance and recent news developments, the following insights can be derived:
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Valuation: TSM has shown strong financial performance, with consistent revenue growth, profitability, and positive cash flow. The company's balance sheet indicates a healthy financial position, with a significant amount of cash and short-term investments. The valuation of TSM should consider its strong market position, growth potential, and financial stability.
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Financial Health: TSM's balance sheet shows a strong financial position, with a high level of shareholder equity and a healthy current ratio. The company's ability to generate positive cash flow and maintain a stable cash position further strengthens its financial health. However, it is important to monitor the company's debt levels and potential risks associated with geopolitical factors.
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Earnings and Revenue Growth: TSM has demonstrated consistent earnings and revenue growth over the past four quarters. The company's profitability, as indicated by the profit margin, has remained consistently high. This suggests that TSM has a strong business model and is well-positioned to capitalize on market opportunities.
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Dividends: The information provided does not mention any dividends paid by TSM. It is important to consider the company's dividend policy and potential future dividend payments when assessing the investment potential.
Viewpoint: [Positive]
Based on the analysis of TSM's financial performance, balance sheet strength, income statement trends, and recent news developments, the overall viewpoint on the investment potential of TSM is positive. The company has shown consistent revenue growth, profitability, and positive cash flow. TSM's strong financial position, with a significant amount of cash and short-term investments, provides stability and flexibility for future growth opportunities. However, it is important to monitor potential risks associated with geopolitical factors and the company's debt levels. Overall, TSM appears to be a promising investment opportunity in the semiconductor industry.
Disclaimer
This report is based on the information provided and the analysis conducted as of February 5, 2024. The analysis is for informational purposes only and should not be considered as financial advice. It is recommended to consult with a financial advisor or conduct further research before making any investment decisions. The accuracy and completeness of the information cannot be guaranteed. The author and the AI assistant are not responsible for any investment losses or gains resulting from the use of this report.