Taiwan Semiconductor Manufacturing
NYSE: TSM · TECHNOLOGY · SEMICONDUCTORS
Updated 2026-06-12
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: 36.24x
P/S Ratio — History
Current: 0.53x
Is TSM overvalued in 2026?
Taiwan Semiconductor Manufacturing (TSM) currently trades at $423.93 per share with a market capitalization of $2,183,868,580,000.00. 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 36.2x, above its 5-year median of 31.6x. The PEG ratio of 1.31 points to a price that reasonably reflects expected earnings growth.
Looking at its own history, TSM is currently trading more expensive than 100% of the last 5Y on P/E. This places it in the 100th 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 $839.44 per share, against the current market price of $423.93. This implies a margin of safety of +49.50%. 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?
TSM scores 84/100 on our Smart Value Score (Grade A), a strong overall profile. The DCF also shows a positive margin of safety, so price and fundamentals line up reasonably well.
What is TSM's fair value?
Our DCF model estimates TSM's intrinsic value at $839.44 per share, versus the current price of $423.93, a margin of safety of +49.50%. Fair value is the present value of the cash flows we project the business to produce, so a price below it means the market is pricing the stock below that conservative estimate.
What P/E ratio does TSM trade at?
TSM trades at a P/E of 36.2x on trailing twelve-month earnings, against a 5-year median of 31.6x. P/E is what you pay per dollar of profit, and sitting above its own median means the stock is pricier than usual relative to its earnings.
Is TSM a buy based on valuation?
Our Smart Value rating for TSM is Strong Buy, from a Smart Value Score of 84/100 that blends growth, quality, and valuation. The rating leans on growth and financial strength, and valuation is usually the weakest leg for a name scoring this high. This is research to inform your decision, not personalized financial advice.
How does TSM's valuation compare to its history?
On P/E, TSM sits in the 100th percentile of its own 5Y range, historically expensive relative to where it has traded. A high percentile means today's multiple is near the top of its historical band.
What is TSM's Smart Value Score?
TSM's Smart Value Score is 84/100. It is a proprietary WallStSmart metric blending growth quality, financial health, and valuation into a single 0-100 read, and scores above 75 are rare, signaling strong multi-factor alignment.