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Texas Instruments (TXN)
NASDAQ:TXN
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Texas Instruments
(NASDAQ:TXN)
Rating:70Outperform
Price Target:
$206.00
▲( 14.31% Upside)
Positive Factors
Demand
Results and guidance reflect improving demand as fundamentals point to TI emerging from the extended cyclical downturn.
Fundamentals
Fundamentals are improving, with customer inventory described as very low, and all segments up.
Supply Chain
Management's comments on geographic manufacturing flexibility should partially assuage some US-China trade concerns, with TI offering one of the most resilient supply chains in semiconductors.
Negative Factors
Macroeconomic Uncertainty
The shift to higher cost 200mm production, China substitution, and premium valuation present risks amid significant macroeconomic uncertainty.
Trade Tensions
TI is front and center in US-China trade tensions given the significant US front end manufacturing footprint and exposure to China.
Visibility
Lead times remain very short, providing limited visibility into demand.
Texas Instruments (TXN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$171.44B
Dividend Yield2.9%
Average Volume (3M)8.88M
Price to Earnings (P/E)35.8
Beta (1Y)1.21
Revenue Growth-4.48%
EPS Growth-17.82%
CountryUS
Employees34,000
SectorTechnology
Sector Strength75
IndustrySemiconductors
Share Statistics
EPS (TTM)1.28
Shares Outstanding908,472,100
10 Day Avg. Volume7,389,938
30 Day Avg. Volume8,879,979
Financial Highlights & Ratios
PEG Ratio21.07
Price to Book (P/B)9.56
Price to Sales (P/S)0.00
P/FCF Ratio107.56
Enterprise Value/Market Cap0.97
Enterprise Value/Revenue2.62
Enterprise Value/Gross Profit17.89
Enterprise Value/Ebitda5.44
Forecast
1Y Price Target
$181.45Price Target Upside0.69% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering23
Texas Instruments Business Overview & Revenue Model
Company DescriptionTexas Instruments Incorporated (TI) is a global technology company that designs and manufactures semiconductors and various integrated circuits. Headquartered in Dallas, Texas, TI operates in the analog and embedded processing sectors, providing components that are essential for electronic systems in markets such as industrial, automotive, personal electronics, communications equipment, and enterprise systems.
How the Company Makes MoneyTexas Instruments generates revenue primarily through the design, manufacture, and sale of analog and embedded processing products. The analog segment, which includes high-performance analog and power management products, is the largest contributor to TI's revenue. These products are used in a wide range of applications, including signal-chain and power-supply designs. The embedded processing segment includes microcontrollers, digital signal processors (DSPs), and applications processors, which are used to control many types of electronic systems. TI's business model is driven by the high-volume production of semiconductors, leveraging its manufacturing capabilities to achieve cost efficiencies. The company also forms strategic partnerships and long-term supply agreements with various customers, which help stabilize revenue streams and ensure product demand. Additionally, TI invests in research and development to innovate and enhance product offerings, further driving growth and maintaining a competitive edge in the semiconductor industry.
Texas Instruments Key Performance Indicators (KPIs)
Any
Revenue by Segment
Shows how much revenue each business unit generates, highlighting which segments are driving growth and which may need strategic adjustments.
Shows how much revenue each business unit generates, highlighting which segments are driving growth and which may need strategic adjustments.
Data provided by:
Main Street Data
Main Street DataTexas Instruments Financial Statement Overview
Summary
Texas Instruments demonstrates solid financial health with strong profitability and effective use of equity capital. While income statement reflects robust margins, growth has moderated. The balance sheet remains strong, with manageable leverage. Cash flow generation is stable, yet free cash flow growth has slowed, warranting attention. Overall, the company is well-positioned, but should focus on enhancing growth and cash flow efficiency.Income Statement
Texas Instruments shows solid profitability with a TTM gross profit margin of 58.0% and a net profit margin of 30.4%. The revenue growth rate over the recent period is 2.6%, indicating modest growth. The EBIT and EBITDA margins are strong at 34.3% and 44.2%, respectively, showcasing operational efficiency. However, the decline from previous years suggests potential challenges in sustaining growth.84
Very Positive
Balance Sheet
The balance sheet is robust with a debt-to-equity ratio of 0.78, indicating manageable leverage. The return on equity (ROE) stands at 29.7%, reflecting effective use of equity capital. The equity ratio is 48.6%, suggesting a healthy proportion of equity financing. However, the slight increase in total debt over time signals a need for cautious debt management.78
Positive
Cash Flow
The company maintains a stable cash flow, with an operating cash flow to net income ratio of 1.26, indicating strong cash generation relative to earnings. The free cash flow to net income ratio is 0.30, suggesting room for improvement in free cash flow generation. A slight decline in free cash flow growth rate highlights potential pressures on cash reserves.76
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 16.05B | 15.64B | 17.52B | 20.03B | 18.34B | 14.46B | Gross Profit |
| 9.31B | 9.09B | 11.02B | 13.77B | 12.38B | 9.27B | EBIT |
| 5.50B | 5.46B | 7.33B | 10.14B | 8.96B | 5.89B | EBITDA |
| 7.62B | 7.54B | 9.01B | 11.22B | 10.06B | 7.20B | Net Income Common Stockholders |
| 4.87B | 4.80B | 6.51B | 8.75B | 7.77B | 5.59B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 5.00B | 7.58B | 8.57B | 9.07B | 9.74B | 6.57B | Total Assets |
| 33.76B | 35.51B | 32.35B | 27.21B | 24.68B | 19.35B | Total Debt |
| 12.85B | 13.60B | 11.22B | 8.73B | 7.74B | 6.80B | Net Debt |
| 10.09B | 10.40B | 8.26B | 5.68B | 3.11B | 3.69B | Total Liabilities |
| 17.35B | 18.61B | 15.45B | 12.63B | 11.34B | 10.16B | Stockholders Equity |
| 16.41B | 16.90B | 16.90B | 14.58B | 13.33B | 9.19B |
| Cash Flow | Free Cash Flow | ||||
| 1.46B | 1.50B | 1.35B | 5.92B | 6.29B | 5.49B | Operating Cash Flow |
| 6.15B | 6.32B | 6.42B | 8.72B | 8.76B | 6.14B | Investing Cash Flow |
| 1.38B | -3.20B | -4.36B | -3.58B | -4.09B | -922.00M | Financing Cash Flow |
| -7.25B | -2.88B | -2.14B | -6.72B | -3.14B | -4.55B |
Texas Instruments Technical Analysis
Neutral
180.21
Price Trends
168.43
Positive
177.68
Positive
187.37
Negative
Market Momentum
6.50
Negative
57.03
Neutral
58.69
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TXN, the sentiment is Neutral. The current price of 180.21 is above the 20-day moving average (MA) of 173.64, above the 50-day MA of 168.43, and below the 200-day MA of 187.37, indicating a neutral trend. The MACD of 6.50 indicates Negative momentum. The RSI at 57.03 is Neutral, neither overbought nor oversold. The STOCH value of 58.69 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TXN.
Texas Instruments Risk Analysis
Texas Instruments disclosed 18 risk factors in its most recent earnings report. Texas Instruments reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Texas Instruments Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $134.65B | 20.18 | 36.37% | 0.99% | 6.12% | -5.66% | |
81 Outperform | $184.05B | 82.14 | 3.90% | ― | 21.71% | 99.00% | |
80 Outperform | $168.89B | 15.66 | 42.21% | 2.25% | 16.15% | 32.28% | |
79 Outperform | $109.63B | 23.58 | 10.10% | 0.48% | 71.05% | ― | |
76 Outperform | $111.34B | 71.59 | 5.21% | 1.69% | -6.17% | -14.16% | |
70 Outperform | $171.44B | 35.75 | 29.04% | 2.90% | -4.48% | -17.82% | |
61 Neutral | $11.41B | 10.19 | -7.05% | 2.95% | 7.46% | -10.52% |
* Technology Sector Average
Performance Comparison
TXN
Texas Instruments
180.21
-11.46
-5.98%
AMD
Advanced Micro Devices
110.71
-49.72
-30.99%
ADI
Analog Devices
211.93
-18.80
-8.15%
AMAT
Applied Materials
160.52
-55.39
-25.65%
MU
Micron
94.83
-30.86
-24.55%
QCOM
Qualcomm
147.37
-50.43
-25.50%
Texas Instruments Earnings Call Summary
Earnings Call Date:Apr 23, 2025
(Q1-2025)
| % Change Since: 19.46%|
Next Earnings Date:Jul 29, 2025
Earnings Call Sentiment Neutral
The earnings call presents a mixed view. There is notable revenue growth and signs of market recovery, particularly in the industrial and automotive sectors. However, there are challenges such as declining gross profit margins, increased operating expenses, and high inventory levels. The global environment remains uncertain due to geopolitical tensions and tariffs.Q1-2025 Updates
Positive Updates
Revenue Growth
First-quarter revenue was $4.1 billion, an increase of 2% sequentially and 11% year over year.
Industrial Market Recovery
The industrial market increased upper single digits after seven consecutive quarters of sequential decline.
Automotive Market Growth
The automotive market increased low single digits and showed a shallow correction pattern.
Operating Profit Increase
Operating profit was $1.3 billion in the quarter, up 3% from the year-ago quarter.
Strong Free Cash Flow
Free cash flow on a trailing twelve-month basis was $1.7 billion.
Geopolitically Dependable Capacity
The company emphasized its flexibility and preparedness to navigate evolving supply chain dynamics.
Negative Updates
Gross Profit Margin Decline
Gross profit margin decreased 90 basis points sequentially.
Increased Operating Expenses
Operating expenses in the quarter were $989 million, up 6% from a year ago.
Inventory Increase
Inventory at the end of the quarter was $4.7 billion, up $160 million from the prior quarter.
High Uncertainty in Global Market
The company acknowledged high uncertainty due to tariffs and geopolitical factors disrupting global supply chains.
Company Guidance
During Texas Instruments Incorporated's first quarter 2025 earnings call, guidance for the second quarter was provided, projecting revenue between $4.17 billion and $4.53 billion, with earnings per share estimated to range from $1.21 to $1.47. The company reported first-quarter revenue of $4.1 billion, a 2% sequential increase and an 11% rise year-over-year. The industrial market showed a recovery, increasing in the upper single digits sequentially, while automotive grew by low single digits. Capital expenditures were noted at $1.1 billion for the quarter, with free cash flow on a trailing twelve-month basis at $1.7 billion. Additionally, the effective tax rate for the second quarter is expected to be around 12% to 13%. The company highlighted its focus on maintaining flexibility in response to geopolitical challenges and the semiconductor cycle, emphasizing its strategic ambitions to ensure long-term success.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.