TSM
Taiwan Semiconductor Manufacturing Company Limited
$420.39
Platform & Compounding FCF
80%
Two-stage FCF DCF
Moderate
·
Conviction
Undervalued
Trading 25.4% below fair value
You pay
$420.39
Bear
$272.42
Fair
$563.90
Bull
$973.70
Bear
$272.42
-35.2%
15% stage 1 growth, 11% discount
Fair
$563.90
+34.1%
25% stage 1 growth, 11% discount
Bull
$973.70
+131.6%
32% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (25% base case)
Terminal Value % of EV
49%
Implied Market Multiple
49.3x
Market is pricing in (growth)
21.0%
vs 25.0% base
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $566.00 from 25 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $563.90 per share.
Warnings
Financial statements were converted from TWD into USD using USDTWD at 0.0311 USD per TWD.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions