Texas Instruments (TXN) AI Stock Analysis

• Market Cap: $174.07B
• Dividend Yield: 3.11%
• Average Volume (3M): 6.07M
• Price to Earnings (P/E): 35.0
• Beta (1Y): 1.14
• Revenue Growth: 9.90%
• EPS Growth: 1.65%
• Country: US
• Employees: 34,000
• Sector: Technology
• Sector Strength: 88
• Industry: Semiconductors
• EPS (TTM): 1.48
• Shares Outstanding: 908,623,050
• 10 Day Avg. Volume: 7,370,519
• 30 Day Avg. Volume: 6,074,310
• PEG Ratio: -1.34
• Price to Book (P/B): 10.12
• Price to Sales (P/S): 10.93
• P/FCF Ratio: 114.16
• Enterprise Value/Market Cap: 1.02
• Enterprise Value/Revenue: 10.24
• Enterprise Value/Gross Profit: 17.81
• Enterprise Value/Ebitda: 21.81
• 1Y Price Target: $195.71
• Price Target Upside: 2.16% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 17
• EPS Forecast (FY): 6.08
• Revenue Forecast (FY): $19.11B

• Rating: 78 Outperform
• Price Target: $206.00 ▲(7.53% Upside)

Texas Instruments' strong financial performance and positive earnings call sentiment are the primary drivers of its stock score. While technical indicators show bullish momentum, the high P/E ratio suggests potential overvaluation. The company's commitment to dividends and strategic investments in manufacturing and technology support long-term growth prospects.

Positive Factors

Strong Revenue Growth

The significant year-over-year revenue growth indicates a robust demand for Texas Instruments' products, suggesting strong market position and effective business strategies.

Free Cash Flow Growth

The substantial increase in free cash flow demonstrates Texas Instruments' strong cash generation ability, enhancing its capacity for reinvestment and shareholder returns.

Leadership Transition

The strategic leadership transition ensures continuity and stability, potentially leading to sustained strategic direction and operational efficiency.

Negative Factors

Gross Margin Decline

A decline in gross margin can pressure profitability, indicating potential challenges in cost management or pricing power that may affect long-term financial health.

Restructuring Charges

Restructuring charges related to plant closures could signal operational challenges and may impact short-term profitability and operational efficiency.

Moderate Market Recovery

A slower market recovery may limit growth opportunities and affect revenue expansion, requiring strategic adjustments to sustain performance.

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 sale of semiconductor products, which are used in a vast array of electronic devices. The company's revenue model is based on the design, manufacturing, and sale of analog and embedded processing chips, which contribute significantly to its earnings. Key revenue streams include the Analog segment, which accounts for the majority of sales, driven by the demand for power management and signal processing components. The Embedded Processing segment also contributes to revenue through microcontrollers and processors used in various applications. Texas Instruments benefits from long-term relationships with major customers in multiple industries, which provide consistent and recurring revenue. Additionally, the company invests in research and development to innovate and introduce new products that meet evolving market needs, further enhancing its revenue potential.

Texas Instruments Financial Statement Overview

Summary

Texas Instruments demonstrates strong financial health with robust profitability, a stable balance sheet, and solid cash flow generation. The company is well-positioned in the semiconductor industry, though it must continue to manage its leverage and sustain revenue growth to maintain its financial strength.

Income Statement

Texas Instruments shows strong profitability with a consistent gross profit margin above 57% and a net profit margin around 29% in the TTM. Revenue growth has been positive recently, indicating a recovery from previous declines. The EBIT and EBITDA margins are robust, reflecting efficient operations. However, the company experienced revenue declines in prior years, which could pose a risk if not managed well.

Balance Sheet

The balance sheet is solid with a manageable debt-to-equity ratio of 0.84 in the TTM, indicating a balanced approach to leverage. Return on equity is strong at over 30%, showcasing effective use of equity to generate profits. The equity ratio is healthy, suggesting a stable financial structure. However, the increasing debt levels over the years warrant monitoring.

Cash Flow

Cash flow metrics are favorable, with a significant free cash flow growth of 38.39% in the TTM, indicating strong cash generation capabilities. The operating cash flow to net income ratio is over 2, suggesting good cash conversion. The free cash flow to net income ratio is improving, though it remains moderate, indicating room for further enhancement.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	17.27B	15.64B	17.52B	20.03B	18.34B	14.46B
Gross Profit	9.93B	9.09B	11.02B	13.77B	12.38B	9.27B
EBITDA	8.11B	7.54B	9.01B	11.22B	10.06B	7.20B
Net Income	5.04B	4.80B	6.51B	8.75B	7.77B	5.59B
Balance Sheet
Total Assets	35.00B	35.51B	32.35B	27.21B	24.68B	19.35B
Cash, Cash Equivalents and Short-Term Investments	5.19B	7.58B	8.57B	9.07B	9.74B	6.57B
Total Debt	14.05B	13.60B	11.22B	9.08B	8.21B	7.12B
Total Liabilities	18.38B	18.61B	15.45B	12.63B	11.34B	10.16B
Stockholders Equity	16.63B	16.90B	16.90B	14.58B	13.33B	9.19B
Cash Flow
Free Cash Flow	2.08B	1.50B	1.35B	5.92B	6.29B	5.49B
Operating Cash Flow	6.90B	6.32B	6.42B	8.72B	8.76B	6.14B
Investing Cash Flow	-149.00M	-3.20B	-4.36B	-3.58B	-4.09B	-922.00M
Financing Cash Flow	-6.03B	-2.88B	-2.14B	-6.72B	-3.14B	-4.55B

Texas Instruments Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 191.58
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 191.58 is above the 20-day moving average (MA) of 182.50, above the 50-day MA of 174.02, and above the 200-day MA of 179.96, indicating a bullish trend. The MACD of 4.62 indicates Negative momentum. The RSI at 62.64 is Neutral, neither overbought nor oversold. The STOCH value of 76.83 is Neutral, 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
QCOM	80 Outperform	$170.74B	31.79	23.34%	2.01%	13.66%	-45.40%
TXN	78 Outperform	$174.07B	34.95	29.60%	3.11%	9.90%	1.65%
ADI	78 Outperform	$147.02B	65.78	6.57%	1.43%	16.89%	39.29%
MU	77 Outperform	$408.28B	34.48	22.55%	0.20%	45.43%	203.31%
ARM	69 Neutral	$112.23B	135.84	12.37%	―	24.81%	27.33%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
INTC	61 Neutral	$234.09B	4,430.19	0.19%	―	-1.49%	―