Texas Instruments (TXN)
Information Technology · $267B market cap · SEC CIK 0000097476
ahead of 39% of the S&P 500 · #49 of 73 in Information Technology
Next reports on Jan 25, 2027, after the close, with analysts expecting $2.65 in earnings per share.
52-week range $152.73 to $334.03. 10% below its 52-week high and 97% above its low.
The case for TXN
- Revenue up 20.3% on the year.
- Earns 41% back on shareholder equity.
- 34% of revenue drops through to net profit.
- Earnings per share up 40.7%.
- Pays a 3.4% dividend while you wait.
- Gross margin of 60% absorbs cost shocks.
The case against
- Expensive for its growth: 37.5× earnings, where 8% a year of growth plus a 3.4% dividend would justify about 24×.
- Priced at 12.9× sales, which leaves no room for a stumble.
- Growth is weak (36/100): revenue +20.3%, EPS +40.7%, +4.1% a year over five years.
- Free cash flow is only 1.0% of its market value, a thin cash return for the price.
What the score is made of
Each factor is half a curve over reported figures and half a rank among the other Information Technology companies (momentum is judged against fixed thresholds only), and the five are blended by weight. The score is where that blend places it in the S&P 500. It describes the last filing and the current price. It is not a forecast.
| Valuewhat you pay for the earnings and cash, against the growth you get | 21 |
|---|---|
| Growthhow fast revenue and earnings are moving, this year and over five | 36 |
| Profitabilityhow much of the revenue becomes profit, and how much of that is cash | 73 |
| Momentumhow the price has behaved lately | 79 |
| Stabilityhow violently it moves, what it owes and what it pays you | 60 |
- Each factor except momentum is half fixed thresholds, half rank among the 73 Information Technology companies.
The financials
Revenue growth
Is the business growing? Yes
| Last 12 months | +20.3% |
|---|---|
| Over 5 years | +4.1% a year |
| FY2025 revenue | $17.7B (+13%) |
Free cash flow
Is it generating real cash? Yes
| FY2025 free cash flow | $2.6B |
|---|---|
| Of revenue | 15% |
| Of profit | 52% |
Profit margins
Is profitability improving? Yes, improving
| Gross margin | 60% |
|---|---|
| Operating margin | 41% |
| Net margin, FY24 → FY25 → now | 30.7% → 28.3% → 34.3% |
Debt vs. cash
Is the balance sheet healthy? Yes, the debt is manageable
| Cash | $3.2B |
|---|---|
| Long-term debt | $13.5B |
| Net debt | $10.3B |
| Years to repay | 1.9 yrs |
Valuation
Is the stock price reasonable? No, expensive
| P/E | 37.5× |
|---|---|
| Fair P/E for its growth | 24× |
| P/FCF | 102.6× |
| Forward P/E | 27.0× |
| EV / EBITDA | 26.0× |
At 37.5× earnings it trades above the 24× that 8% a year of growth plus a 3.4% dividend would justify. At 102.6× free cash flow it trades well above that same mark.
The financials, five years deep
Pulled from Texas Instruments's XBRL filings on SEC EDGAR. Italic rows are worked out from the others.
| FY2025 | FY2024 | FY2023 | FY2022 | FY2021 | |
|---|---|---|---|---|---|
| Revenue growth | |||||
| Revenue | $17.7B | $15.6B | $17.5B | $20.0B | $18.3B |
| Change on the year | +13% | −11% | −13% | +9% | — |
| Free cash flow | |||||
| Free cash flow | $2.6B | $1.5B | $1.3B | $5.9B | $6.3B |
| Of revenue | 15% | 10% | 8% | 30% | 34% |
| Profit margins | |||||
| Gross margin | 57.0% | 58.1% | 62.9% | 68.8% | 67.5% |
| Operating margin | 34.1% | 34.9% | 41.8% | 50.6% | 48.8% |
| Net margin | 28.3% | 30.7% | 37.2% | 43.7% | 42.4% |
| Debt vs. cash | |||||
| Cash | $3.2B | $3.2B | $3.0B | $3.0B | $4.6B |
| Long-term debt | $13.5B | $12.8B | $10.6B | $8.2B | $7.2B |
| Net cash (debt) | −$10.3B | −$9.6B | −$7.7B | −$5.2B | −$2.6B |
What Texas Instruments says it does
We design and manufacture semiconductors that we sell to electronics designers and manufacturers all over the world. Our operations began in 1930, and we are incorporated in Delaware. With headquarters in Dallas, Texas, we have design, manufacturing or sales operations in more than 30 countries. Our two reportable segments are Analog and Embedded Processing, and we report the results of our remaining business activities in Other. In 2025, we generated $17.68 billion of revenue. For decades, we have operated with a passion to create a better world by making electronics more affordable through semiconductors. We were pioneers in the transition from vacuum tubes to transistors and then to integrated circuits. As each generation has become more reliable, more affordable and lower in power, semiconductors are used by a growing number of customers and markets. Our passion continues to be alive today as we help our customers develop…
Risk factors TXN lists in its 10-K
- Like many companies, we are susceptible to a potential downturn associated with macroeconomic weakness, which may affect our performance and the performance of our customers
- For example, we may face increased competition as a result of China actively promoting and reshaping its domestic semiconductor industry through policy changes and investment, which could prevent us from competing effectively
- Our ability to match inventory and production with the product mix needed to fill orders may affect our ability to meet a quarter’s revenue forecast
- Our operating results and our reputation could be adversely affected by cybersecurity events, breaches, disruptions or other incidents relating to our information technology systems
- If we do not successfully implement these changes, our business plans and operating results could be adversely affected
- Climate change might exacerbate these occurrences or cause natural disasters to occur with greater frequency and with more intense effects
- Rapid technological change in markets we serve could contribute to shortened product life cycles and a decline in average selling prices of our products
- In some cases, we might not realize a return or the expected return on our investments because they are generally made before commercial viability can be assured
- Further, projects that are commercially viable may not contribute to our operating results until at least a few years after they are completed
- Additionally, a breach or other incident relating to our suppliers’ information technology systems could result in a release of confidential or proprietary information