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The 3-Year Sortino Ratio measures the additional return that an investor receives per unit of the downside risk over the past three years. As of today (2026-09-03), Taiwan Semiconductor Manufacturing Co's 3-Year Sortino Ratio is 2.99.
Taiwan Semiconductor Manufacturing Co (NYSE:TSM) 3-Year Sortino Ratio Explanation
The 3-Year Sortino Ratio inidicates the risk-adjusted return of an investment over the past three year. It is calculated as the annualized result of the average three-year monthly excess returns divided by the standard deviation of negative returns in the three-year period. The monthly excess return is the monthly investment return minus the monthly risk-free rate (typically the 10-year Treasury Constant Maturity Rate). If the risk-free rate for a specific region is not available, U.S. data is used by default.
Differnt from the Sharpe Ratio that penalizes both upside and downside volatility equally, the Sortino Ratio penalizes only those returns falling below a user-specified target or required rate of return. The expected returns here is set to the risk-free rate as well.
Taiwan Semiconductor Manufacturing Co 3-Year Sortino Ratio Related Terms
TSM vs NVDA, AVGO, MU: 3-Year Sortino Ratio Comparison
For the Semiconductors subindustry, Taiwan Semiconductor Manufacturing Co's 3-Year Sortino Ratio, along with its competitors' market caps and 3-Year Sortino Ratio data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Taiwan Semiconductor Manufacturing Co 3-Year Sortino Ratio vs Semiconductors Industry
For the Semiconductors industry and Technology sector, Taiwan Semiconductor Manufacturing Co's 3-Year Sortino Ratio distribution charts can be found below:
* The bar in red indicates where Taiwan Semiconductor Manufacturing Co's 3-Year Sortino Ratio falls into.
Taiwan Semiconductor Manufacturing Co 3-Year Sortino Ratio Calculation
The 3-Year Sortino Ratio measures the risk-adjusted return of an investment asset or portfolio in the last three year, focusing specifically on downside risk rather than total risk. A stock / portfolio's 3-Year Sortino Ratio can be calculated by dividing the difference between the three-year average monthly returns of the investment and the risk-free rate, by the standard deviation of the downside risks over the past three year.
A downside risk is a potential loss from the asset or investment. The Downside risk here is measured by the downside deviation, which is the standard deviation of negative returns.
Taiwan Semiconductor Manufacturing Co (TSM) has a 3-Year Sortino Ratio of 2.99 as of Sep. 03, 2026. 3-Year Sortino Ratio measures the additional return that an investor receives per unit of the downside risk over the past three years. View historical data for Taiwan Semiconductor Manufacturing Co and its competitors.
Is Taiwan Semiconductor Manufacturing Co's 3-Year Sortino Ratio too high?
Taiwan Semiconductor Manufacturing Co's current 3-Year Sortino Ratio is 2.99. Overall, Taiwan Semiconductor Manufacturing Co has a GF Score™ of 97/100 and is considered Modestly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Taiwan Semiconductor Manufacturing Co's 3-Year Sortino Ratio compare to NVDA and AVGO?
Taiwan Semiconductor Manufacturing Co's 3-Year Sortino Ratio of 2.99 can be compared against companies in the Semiconductors industry. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good 3-Year Sortino Ratio for a Semiconductors company?
A good 3-Year Sortino Ratio depends on the Semiconductors industry context. However, 3-Year Sortino Ratio should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high 3-Year Sortino Ratio mean?
A high 3-Year Sortino Ratio can signal that a stock is expensive relative to its fundamentals. 3-Year Sortino Ratio measures the additional return that an investor receives per unit of the downside risk over the past three years. View historical data for Taiwan Semiconductor Manufacturing Co and its competitors. Taiwan Semiconductor Manufacturing Co's current 3-Year Sortino Ratio is 2.99. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Taiwan Semiconductor Manufacturing Co stock overvalued right now?
Based on GuruFocus' analysis, Taiwan Semiconductor Manufacturing Co (TSM) is currently considered Modestly Overvalued. The stock's GF Value™ is $322.57, compared to a current price of $416.40 — trading 29.1% above its estimated fair value. The current 3-Year Sortino Ratio is 2.99. Taiwan Semiconductor Manufacturing Co's overall GF Score™ is 97/100 with 5 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is 3-Year Sortino Ratio calculated?
3-Year Sortino Ratio is calculated from a company's financial statements. For Taiwan Semiconductor Manufacturing Co (TSM), the current 3-Year Sortino Ratio is 2.99 as of Sep. 03, 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Taiwan Semiconductor Manufacturing Co (TSM) Overvalued in 2026?
Based on GuruFocus' analysis, Taiwan Semiconductor Manufacturing Co stock appears to be overvalued.
The current stock price of $416.40 is trading 29.1% above its estimated GF Value™ of $322.57.
GuruFocus considers Taiwan Semiconductor Manufacturing Co to be Modestly Overvalued.
Key valuation signals for TSM:
3-Year Sortino Ratio: 2.99
GF Value™: $322.57 vs. price of $416.40 (29.1% above fair value)
No single metric tells the full story. See the TSM stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Taiwan Semiconductor Manufacturing Co. is the world's largest dedicated chip foundry, with about 70% market share in 2025. TSMC was founded in 1987 as a joint venture of Philips, the government of Taiwan, and private investors. It went public in Taiwan in 1994 and as an ADR in the US in 1997. TSMC's scale and high-quality technology allow the firm to generate solid operating margins, even in the highly competitive foundry business. Furthermore, the shift to the fabless business model has created tailwinds for TSMC. The foundry leader has an illustrious base of customers, including Apple, AMD, and Nvidia, that look to apply its cutting-edge process technologies to their semiconductor designs. TSMC employs more than 83,000 people.
97GF Score
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