Texas Instruments (TXN) Analysis

This report is auto-generated by an AI stock research platform for informational purposes only. The content is for general information and research reference, and does not constitute financial advice. Data may lag or be incomplete. Always conduct your own research and consult qualified professionals before making any financial decisions. # [Qiltrack AI] Texas Instruments Inc (TXN) 3-Minute Overview > **💡 One-Sentence Summary** > > Simply put, Texas Instruments is a mature, highly profitable analog chip maker that throws off a lot of cash, but right now the market is still pricing it like a premium-quality business even though growth has been soft. > **📍 Basic Profile** > > Market Cap **$170.4 billion** · Semiconductors · NASDAQ NMS - GLOBAL MARKET · Price **$187.19** > **⚡ 3 Things You Should Know** > > 1. 💰 Quality Business, No Question: TXN still posts a **28.28% net margin** and **57.02% gross margin**, which is excellent for a chip company. In other words, even in a slower part of the cycle, this is still a very profitable machine. > > 2. 📉 Growth Has Been Under Pressure: **3-year revenue growth is -4.07%** and **3-year EPS growth is -16.62%**, so this is not a “high-growth semiconductor story” today. What you might care about is that the stock’s premium valuation leaves less room for weak demand or a slow recovery. > > 3. ⚠️ Dividend Looks Attractive, but Coverage Is Tight: The indicated dividend yield is about **3.02%**, which is nice, but the **payout ratio is 99.96%**. Basically, it means the dividend is a key part of the TXN story, but earnings need to recover for that setup to feel more comfortable. > **🎯 Quick Health Check** > > | Dimension | Rating | Details | > |-----------|--------|---------| > | Profitability | Strong💪 | Net margin 28.28%, well above typical industrial chip peers | > | Growth Rate | Slow🐢 | Revenue growth has been negative on a 3-year basis | > | Financial Health | Healthy💚 | Debt/equity 86.33%, but liquidity is very strong and interest coverage is solid | > | Valuation | Pricey | PE 34.08x | --- ## 📋 Layer 2: 2-Minute Deep Dive #### 📊 How Does This Company Make Money? **Business Model in One Sentence:** Texas Instruments designs and sells analog and embedded semiconductors to industrial and electronics customers, making money by supplying high-volume, high-margin chips used in power, sensing, control, and embedded applications. **Revenue Breakdown:** | Business | Share | Trend | Comment | |----------|-------|-------|---------| | Analog chips | [Data unavailable] | → | This is historically TXN’s core engine and tends to be sticky because these parts stay designed into products for years | | Embedded processing | [Data unavailable] | → | Smaller than analog, but helps diversify into control and processing applications | | Other / legacy | [Data unavailable] | ↓ | Usually less important to the long-term story | **Profitability Metrics:** | Metric | Value | Ranking | Interpretation | |--------|-------|---------|----------------| | Gross Margin | 57.02% | Top tier | Shows strong pricing power and efficient manufacturing for a mature chip business | | Net Margin | 28.28% | Top tier | Even after all expenses, TXN keeps a large chunk of revenue as profit | | ROE | 30.44% | Excellent>20% | Tells you the company is very effective at turning shareholder capital into earnings | --- #### 📈 How's the Growth? **Growth Assessment:** Slowing | Metric | Latest | vs Last Year | Trend | |--------|--------|--------------|-------| | Revenue Growth | [Data unavailable] | [Data unavailable] | [Data unavailable] | | Profit Growth | [Data unavailable] | [Data unavailable] | [Data unavailable] | **Growth Quality:** > Worth noting: the longer-term trend is weak, with **3-year revenue growth of -4.07%** and **3-year EPS growth of -16.62%**. That suggests the recent softness is not just noise. The more bullish view is that TXN is in a cyclical downturn tied to industrial and broader analog demand, not a broken business. Recent commentary around factory automation recovery and AI power architecture hints at future catalysts, but for now the recovery story still needs proof in the numbers. --- #### 💰 Financial Health Check **One Sentence:** Think of it like someone with a very strong paycheck, plenty of cash in the bank, and manageable debt—but who is also committed to a big recurring dividend payment. | Metric | Value | Safe Zone | Assessment | |--------|-------|-----------|------------| | Debt Ratio | 86.33% (debt/equity) | <60% safe | ⚠️High | | Current Ratio | 4.35 | >1.5 healthy | ✅Safe | | Cash Flow | $9.02/share | >0 | ✅Positive | What’s interesting is that the balance sheet is not fragile at all on liquidity: **current ratio 4.35** and **quick ratio 2.17** are both strong. Interest coverage at **11.52x** also says debt is serviceable. So the main concern is less “can it survive?” and more “can earnings re-accelerate enough to support both valuation and dividend growth comfortably?” --- #### 🏷️ Is It Expensive Now? **Price Position (based on 52-week range):** - 52-Week Low: $139.95 - 52-Week High: $231.32 - Current: $187.19, In the middle | Position Range | Cheap Zone | Fair Zone | Pricey Zone | |----------------|------------|-----------|-------------| | Criteria | 0-33% | 33-66% | 66-100% | | **Current** | | ●(51.7% position) | | **Valuation Comparison:** | Comparison | Current | Reference | Assessment | |------------|---------|-----------|------------| | vs Own History | PE 34.08x | [Data unavailable] | [Data unavailable] | | vs Peers | PE 34.08x | Industry avg [Data unavailable] | [Data unavailable] | **What the Current Valuation is Betting On:** > Basically, the market is still giving TXN a premium multiple because it expects this downturn to be cyclical, not structural. A **34x trailing PE** suggests investors are looking through current earnings weakness and betting on a rebound in industrial demand, continued analog chip resilience, and some upside from AI-related power and edge applications. If that recovery comes slowly, the multiple could feel stretched. --- #### 📰 Any Recent News? | Date | Event | Impact | |------|-------|--------| | 2026-03-18 | TXN announced an **800V AI data center power architecture** tied to NVIDIA’s reference design | Positive — interesting because it gives TXN a clearer angle into AI infrastructure, not just traditional industrial markets | | 2026-03-05 | TXN partnered with **NVIDIA for safer humanoid robot deployment** | Positive — strengthens the “edge AI / robotics” narrative, though it’s still more strategic than near-term financial proof | | 2026-03-05 | CEO signaled **recovery in factory and automation markets** | Neutral to Positive — this matters because industrial is a major demand driver, but investors will want to see actual order and revenue improvement | --- ## 📊 Layer 3: Want More? 3-Minute Complete Analysis #### I. Detailed Financial Data **Profitability Trends:** | Metric | This Year | Last Year | Year Before | 3-Year Trend | |--------|-----------|-----------|-------------|--------------| | Gross Margin | 57.02% | [Data unavailable] | [Data unavailable] | [Data unavailable] | | Net Margin | 28.28% | [Data unavailable] | [Data unavailable] | [Data unavailable] | | ROE | 30.44% | [Data unavailable] | [Data unavailable] | [Data unavailable] | **Growth Trends:** | Metric | This Year | Last Year | Year Before | 3-Year Trend | |--------|-----------|-----------|-------------|--------------| | Revenue Growth | [Data unavailable] | [Data unavailable] | [Data unavailable] | ↓ | | Profit Growth | [Data unavailable] | [Data unavailable] | [Data unavailable] | ↓ | | EPS Growth | [Data unavailable] | [Data unavailable] | [Data unavailable] | ↓ | Additional context: - **Revenue growth (3Y): -4.07%** - **Revenue growth (5Y): 4.1%** - **EPS growth (3Y): -16.62%** - **EPS growth (5Y): -1.8%** This tells a pretty clear story: over a full cycle, TXN remains a solid business, but the last few years have been noticeably weaker than the longer-term average. --- #### II. Earnings Track Record **Last 4 Quarters vs Expectations:** | Quarter | EPS Expected | EPS Actual | Surprise | |---------|--------------|------------|----------| | 2025-12-31 | $1.31 | $1.27 | -2.77% Miss 😟 | | 2025-09-30 | $1.50 | $1.48 | -1.62% Miss 😟 | | 2025-06-30 | $1.37 | $1.41 | +3.14% Beat 😀 | | 2025-03-31 | $1.08 | $1.28 | +18.72% Beat 😀 | **Earnings Trend Interpretation:** TXN’s recent earnings pattern is mixed. The first half of the year showed decent upside versus expectations, but the last two quarters slipped into modest misses. In other words, the business isn’t collapsing, but momentum clearly cooled, which fits the broader story of a high-quality company waiting for demand to turn. --- #### III. What the Market Thinks **Analyst Ratings:** | Rating | Count | Percentage | |--------|-------|------------| | Strong Buy/Buy | 16 firms | 35.6% | | Hold | 23 firms | 51.1% | | Sell | 6 firms | 13.3% | **Target Price:** [Data unavailable] ~ [Data unavailable] (Median [Data unavailable]) **vs Current Price:** [Data unavailable] **Insider Activity:** Net selling in past 3 months > Recent filings show multiple **sell (S)** transactions, with several linked to **option exercises (M)** followed by sales. That usually matters less than open-market conviction buying. So this doesn’t automatically mean management is bearish, but it also doesn’t give you the comforting signal that insiders are aggressively buying the dip. --- #### IV. Key Risk Alerts **3 Risks to Watch:** 1. **Cycle Risk:** TXN is still exposed to industrial and analog semiconductor demand swings → If end-market recovery takes longer than expected, earnings may stay under pressure longer than bulls assume. 2. **Valuation Risk:** A **34.08x PE** is rich for a company with negative 3-year revenue and EPS growth → If growth does not rebound, the stock could de-rate even if the business remains solid. 3. **Dividend Coverage Risk:** The **99.96% payout ratio** is very high → If profits stay weak, dividend growth could slow sharply or capital allocation flexibility could tighten. --- ### 🎬 Summary & Next Steps > **📝 Three-Sentence Summary** > > **What it is:** Texas Instruments is a high-quality analog semiconductor company with durable margins, strong cash generation, and a shareholder-friendly profile. > > **Key strength:** Its biggest advantage is that even during a soft cycle, it remains highly profitable and financially stable, which says a lot about the underlying business quality. > > **Key risk:** The main concern is that the stock still trades at a premium multiple while growth has been weak and dividend coverage looks tighter than ideal. --- > **🔍 Want to Learn More?** > > • Want to know if this company has a strong moat? → Try【Buffett Mode】for deeper analysis > > • Want to check for hidden landmines? → Try【Muddy Mode】for risk screening > > • Is this a growth stock? Want to calculate if it's worth the bet? → Try【Musk Mode】for analysis