Taiwan Semiconductor Manufacturing
NYSE: TSM · TECHNOLOGY · SEMICONDUCTORS
Updated 2026-04-29
Taiwan Semiconductor Manufacturing (TSM) Stock Valuation Analysis
Fair value estimate, historical valuation range, and quality signals for TSM.
Valued
Fundamentals support the current valuation. Strong combination of growth, quality, and price.
TSM historical valuation range
Where current P/E sits in TSM's own 5Y range.
TSM intrinsic value (DCF)
DCF-based fair value estimate vs current market price.
Intrinsic value calculated using discounted cash flow (DCF) model based on projected free cash flows, discount rate, and terminal growth assumptions. A positive margin of safety indicates the current price is below estimated fair value, providing a cushion against estimation error.
TSM valuation signals
Quick-read green flags, caution flags, and risks based on current metrics.
P/E Ratio — History
Current: 34.49x
P/S Ratio — History
Current: 0.51x
Is TSM overvalued in 2026?
Taiwan Semiconductor Manufacturing (TSM) currently trades at $393.83 per share with a market capitalization of $2,087,318,585,000.00. Based on our multi-factor framework, the stock looks attractively valued with a Smart Value Score of 84/100. This score blends growth quality, financial health, and price attractiveness into a single institutional-grade read.
The stock trades at a P/E ratio of 34.5x, above its 5-year median of 29.9x. The PEG ratio of 1.30 points to a price that reasonably reflects expected earnings growth.
Looking at its own history, TSM is currently trading more expensive than 97% of the last 5Y on P/E. This places it in the 97th percentile of its historical range, a zone where forward returns have typically been muted.
Our discounted cash flow model estimates TSM's intrinsic value at $1,399.41 per share, against the current market price of $393.83. This implies a margin of safety of +72.43%. A meaningful cushion exists against model error, making this a reasonable risk-adjusted entry.
The Piotroski F-Score of 6/9 puts financial quality in a middling range, neither a standout strength nor an obvious red flag.
Bottom line: TSM looks attractively valued on our framework, with a Smart Value Score of 84/100. The combination of reasonable price, healthy growth, and quality fundamentals makes it worth serious consideration.
Frequently asked questions
Is TSM overvalued in 2026?
Based on a Smart Value Score of 84/100, TSM is not overvalued. Fundamentals support the current price and offer reasonable margin of safety.
What is TSM's fair value?
Our DCF model estimates TSM's intrinsic value at $1,399.41 per share, versus the current price of $393.83. This produces a margin of safety of +72.43%.
What P/E ratio does TSM trade at?
TSM trades at a P/E of 34.5x on trailing twelve-month earnings, compared to its 5-year median of 29.9x.
Is TSM a buy based on valuation?
WallStSmart does not issue buy or sell recommendations. Our Smart Value Score of 84/100 reflects the combined read on growth, quality, and price. The profile skews favorable for long-term accumulation.
How does TSM's valuation compare to its history?
On P/E, TSM currently sits in the 97th percentile of its own 5Y range. That is historically expensive relative to where it has traded over the period.
What is TSM's Smart Value Score?
TSM's Smart Value Score is 84/100. The Smart Value Score is a proprietary WallStSmart metric blending growth quality, financial health, and valuation attractiveness into a single 0-100 read. Scores above 75 are rare and indicate strong multi-factor alignment.