Texas Instruments (TXN) AI Stock Analysis

• Market Cap: $188.13B
• Dividend Yield: 2.62%
• Average Volume (3M): 6.22M
• Price to Earnings (P/E): 39.2
• Beta (1Y): 1.22
• Revenue Growth: -4.48%
• EPS Growth: -17.82%
• Country: US
• Employees: 34,000
• Sector: Technology
• Sector Strength: 88
• Industry: Semiconductors
• EPS (TTM): 1.28
• Shares Outstanding: 908,472,100
• 10 Day Avg. Volume: 6,252,386
• 30 Day Avg. Volume: 6,215,714
• PEG Ratio: 24.24
• Price to Book (P/B): 10.99
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 123.75
• Enterprise Value/Market Cap: 1.01
• Enterprise Value/Revenue: 2.99
• Enterprise Value/Gross Profit: 20.42
• Enterprise Value/Ebitda: 6.21
• 1Y Price Target: $191.07
• Price Target Upside: -9.21% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 24

• Rating: 77 Outperform
• Price Target: $233.00 ▲(10.72%Upside)

Texas Instruments' strong financial performance and technical momentum are key strengths, supporting a solid stock score. However, concerns about valuation and geopolitical risks, along with challenges in maintaining profit margins and cash flow growth, slightly dampen its attractiveness. Investors should monitor these factors closely.

Positive Factors

Cyclical recovery

Cyclical recovery may be starting, with Q3 estimates appearing unaggressive, indicating potential positive revisions as industrial segments show signs of bottoming.

Improving fundamentals

Fundamentals are improving, with customer inventory described as very low, and all segments up, pointing to a recovery from the extended cyclical downturn.

Market share stabilization

Market share, while still under pressure, appears to have stabilized and even ticked up somewhat recently, suggesting potential for improved competitive positioning.

Negative Factors

Gross margin risks

Significant gross margin risks persist due to the investment process TXN was embarking upon, with consensus gross margin estimates compressed and lower in the future.

US-China trade tensions

TI is front and center in US-China trade tensions given the significant US front end manufacturing footprint and ~20% exposure to China, adding uncertainty to the outlook.

Valuation concerns

The shares remain expensive at approximately 35x P/FE, a 40% premium to the SOX and almost 60% premium to the S&P, limiting opportunity for upside.

Texas Instruments Business Overview & Revenue Model

Company Description

Texas Instruments Incorporated designs, manufactures, and sells semiconductors to electronics designers and manufacturers worldwide. It operates in two segments, Analog and Embedded Processing. The Analog segment offers power products to manage power requirements in various levels using battery-management solutions, DC/DC switching regulators, AC/DC and isolated controllers and converters, power switches, linear regulators, voltage supervisors, voltage references, and lighting products. This segment also provides signal chain products that sense, condition, and measure signals to allow information to be transferred or converted for further processing and control for use in end markets, including amplifiers, data converters, interface products, motor drives, clocks, and sensing products. The Embedded Processing segment offers microcontrollers that are used in electronic equipment; digital signal processors for mathematical computations; and applications processors for specific computing activity. This segment offers products for use in various markets, such as industrial, automotive, personal electronics, communications equipment, enterprise systems, and calculators and other. The company also provides DLP products primarily for use in projectors to create high-definition images; calculators; and application-specific integrated circuits. It markets and sells its semiconductor products through direct sales and distributors, as well as through its website. Texas Instruments Incorporated was founded in 1930 and is headquartered in Dallas, Texas.

How the Company Makes Money

Texas 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 Financial Statement Overview

Summary

Texas Instruments demonstrates solid financial health with strong profitability and effective use of equity capital. The income statement reflects robust margins, although 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.

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.

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.

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.

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
EBITDA	7.62B	7.54B	9.01B	11.22B	10.06B	7.20B
Net Income	4.87B	4.80B	6.51B	8.75B	7.77B	5.59B
Balance Sheet
Total Assets	33.76B	35.51B	32.35B	27.21B	24.68B	19.35B
Cash, Cash Equivalents and Short-Term Investments	5.00B	7.58B	8.57B	9.07B	9.74B	6.57B
Total Debt	12.85B	13.60B	11.22B	8.73B	7.74B	6.80B
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

• Technical Analysis Sentiment: Positive
• Last Price: 210.45
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TXN, the sentiment is Positive. The current price of 210.45 is above the 20-day moving average (MA) of 199.75, above the 50-day MA of 183.30, and above the 200-day MA of 187.25, indicating a bullish trend. The MACD of 6.73 indicates Negative momentum. The RSI at 73.87 is Negative, neither overbought nor oversold. The STOCH value of 93.32 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TXN.

Texas Instruments Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ADI	81 Outperform	$117.59B	64.51	5.21%	1.66%	-6.17%	-14.16%
QCOM	81 Outperform	$174.08B	16.14	42.21%	2.23%	16.15%	32.28%
AMAT	80 Outperform	$147.03B	22.30	36.37%	1.00%	6.12%	-5.66%
AMD	80 Outperform	$220.69B	99.77	3.90%	―	21.71%	99.00%
MU	78 Outperform	$135.29B	21.82	13.11%	0.37%	58.22%	―
TXN	77 Outperform	$188.13B	39.24	29.04%	2.62%	-4.48%	-17.82%
Sector *	63 Neutral	£569.62M	24.70	-6.00%	2.44%	3.52%	-29.29%

Texas Instruments Corporate Events

Texas Instruments Issues $1.2 Billion in Notes

On May 23, 2025, Texas Instruments completed the issuance and sale of $1.2 billion in notes, consisting of $550 million in 4.500% Notes due 2030 and $650 million in 5.100% Notes due 2035. This financial move, facilitated by major underwriters, is part of Texas Instruments’ strategic financial management, potentially impacting its market positioning and offering stakeholders insights into its future financial strategies.

The most recent analyst rating on (TXN) stock is a Hold with a $160.00 price target. To see the full list of analyst forecasts on Texas Instruments stock, see the TXN Stock Forecast page.