Texas Instruments doesn’t just create semiconductors; it powers the very technology that drives our daily lives, from smartphones to smart cars. With a legacy of innovation since 1930, TXN stands at the forefront of the semiconductor industry, renowned for its high-quality analog and embedded processing solutions. As we delve into its current financial standing, one must consider: do its fundamentals still align with its market valuation and growth potential in an ever-evolving tech landscape?
Table of contents
Company Description
Texas Instruments Incorporated (TXN), founded in 1930 and headquartered in Dallas, Texas, is a leading player in the semiconductor industry. The company operates primarily through two segments: Analog and Embedded Processing. Its Analog segment provides essential power management solutions and signal chain products, catering to diverse markets such as automotive and industrial. Meanwhile, the Embedded Processing segment focuses on microcontrollers and digital signal processors, serving sectors from personal electronics to communications. With a market cap of approximately $145B, Texas Instruments exemplifies strength in innovation and product diversification, continually shaping the semiconductor landscape through advanced technology and sustainable practices.
Fundamental Analysis
In this section, I will analyze Texas Instruments Incorporated’s income statement, financial ratios, and dividend payout policy to evaluate its financial health and investment potential.
Income Statement
The following table presents the income statement for Texas Instruments Incorporated (TXN) over the past five fiscal years, highlighting key financial metrics to assist in evaluating the company’s performance.
| Metric | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Revenue | 14.46B | 18.34B | 20.03B | 17.52B | 15.64B |
| Cost of Revenue | 5.19B | 5.97B | 6.26B | 6.50B | 6.55B |
| Operating Expenses | 3.38B | 3.42B | 3.63B | 3.69B | 3.63B |
| Gross Profit | 9.27B | 12.34B | 13.77B | 11.02B | 9.09B |
| EBITDA | 7.20B | 10.06B | 11.23B | 9.01B | 7.54B |
| EBIT | 6.21B | 9.10B | 10.25B | 7.77B | 5.96B |
| Interest Expense | 0.19B | 0.18B | 0.21B | 0.35B | 0.51B |
| Net Income | 5.60B | 7.77B | 8.75B | 6.51B | 4.80B |
| EPS | 6.05 | 8.38 | 9.51 | 7.13 | 5.24 |
| Filing Date | 2021-02-05 | 2022-02-04 | 2023-02-03 | 2024-02-02 | 2025-02-14 |
Over the past five years, Texas Instruments has experienced significant fluctuations in revenue and net income. Notably, revenue peaked in 2022 at 20.03B but has seen a decline in 2023 and 2024, reflecting market challenges. Gross profit margins have tightened, especially in the recent year, with net income dropping to 4.80B in 2024 from 6.51B in 2023. The increase in interest expenses also contributed to this decline. The company’s performance suggests a cautious approach moving forward, focusing on cost management and operational efficiency to stabilize earnings.
Financial Ratios
The table below summarizes key financial ratios for Texas Instruments Incorporated (TXN) over the last five fiscal years.
| Ratio | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Net Margin | 38.69% | 42.35% | 43.68% | 37.16% | 30.68% |
| ROE | 11.52% | 13.99% | 14.41% | 12.73% | 9.67% |
| ROIC | 10.75% | 12.94% | 13.29% | 12.06% | 8.93% |
| P/E | 27.02 | 22.39 | 17.30 | 23.78 | 35.63 |
| P/B | 16.45 | 13.05 | 10.38 | 9.16 | 10.12 |
| Current Ratio | 4.28 | 5.33 | 4.70 | 4.55 | 4.12 |
| Quick Ratio | 3.47 | 4.58 | 3.77 | 3.35 | 2.88 |
| D/E | 0.77 | 0.62 | 0.62 | 0.66 | 0.80 |
| Debt-to-Assets | 36.79% | 33.25% | 33.37% | 34.69% | 38.29% |
| Interest Coverage | 31.02 | 48.70 | 47.38 | 20.77 | 10.76 |
| Asset Turnover | 0.75 | 0.74 | 0.74 | 0.54 | 0.44 |
| Fixed Asset Turnover | 4.42 | 3.57 | 2.91 | 1.75 | 1.38 |
| Dividend Yield | 2.27% | 2.34% | 2.84% | 2.94% | 2.80% |
Interpretation of Financial Ratios
In 2024, TXN’s financial ratios indicate a decline in profitability, particularly net margin dropping to 30.68%. The high P/E ratio of 35.63 may suggest overvaluation compared to historical standards. The debt ratios show increased leverage, with D/E at 0.80, raising potential concerns regarding financial risk.
Evolution of Financial Ratios
Over the past five years, TXN has experienced a downward trend in profitability ratios, particularly net margin and ROIC, reflecting increasing operational challenges. Despite maintaining solid liquidity with robust current and quick ratios, the rising debt levels are concerning for long-term financial stability.
Distribution Policy
Texas Instruments (TXN) has a solid dividend policy, with a current dividend yield of approximately 2.8%. The dividend payout ratio stands at 99.9%, indicating a commitment to returning cash to shareholders. However, this high ratio raises concerns about sustainability, particularly if earnings fluctuate. Additionally, the company is executing share buyback programs, which can further enhance shareholder value but also carry risks if done excessively. Overall, the distribution strategy appears to support long-term value creation, albeit with caution warranted regarding payout sustainability.
Sector Analysis
Texas Instruments (TXN) is a leading semiconductor company specializing in analog and embedded processing products, facing competition from firms like Intel and Analog Devices. Its competitive advantages include a strong market presence, diverse product portfolio, and consistent innovation.
Strategic Positioning
Texas Instruments Incorporated (TXN) holds a significant position in the semiconductor market, primarily through its robust Analog and Embedded Processing segments. With a market cap of approximately $145B, TXN commands a notable share among competitors. The company faces competitive pressure from industry giants, but its commitment to innovation and a diverse product range helps mitigate this risk. Additionally, the ongoing technological disruption in semiconductors necessitates continuous adaptation, which TXN appears well-equipped to handle, given its historical focus on research and development.
Revenue by Segment
The following chart illustrates Texas Instruments’ revenue breakdown by segment for the fiscal year 2024, highlighting shifts and performance trends.
In FY 2024, Texas Instruments generated $12.16B from Analog and $2.53B from Embedded Processing. The Analog segment continues to be the primary revenue driver, although it shows a decline from $13.04B in FY 2023. Similarly, Embedded Processing has decreased from $3.37B in the previous year. This trend indicates some market saturation or increased competition, which may pose risks to margins as the company navigates a challenging economic environment. Keeping an eye on these segments will be crucial for assessing future growth potential.
Key Products
Texas Instruments Incorporated (TXN) is renowned for its diverse range of semiconductor products that cater to various industries. Below is a summary of some of their key offerings:
| Product | Description |
|---|---|
| Analog Power Management | Solutions for managing power requirements including battery-management systems and voltage regulators. |
| Signal Chain Products | Components that sense, condition, and measure signals for processing and control across various applications. |
| Microcontrollers | Integrated circuits used in electronic devices for various functions, including automation and control systems. |
| Digital Signal Processors (DSP) | Specialized processors for performing complex mathematical computations and processing signals. |
| DLP Technology | Digital Light Processing products primarily used in projectors for creating high-definition images. |
| Application-Specific Integrated Circuits (ASICs) | Customized chips designed for specific applications, enhancing performance and efficiency. |
| Embedded Processors | Processors designed for specific computing activities in industrial, automotive, and personal electronics. |
These products highlight Texas Instruments’ commitment to innovation and quality in the semiconductor industry, making them a key player in technology development.
Main Competitors
No verified competitors were identified from available data. However, Texas Instruments Incorporated (TXN) operates within the semiconductor industry and is estimated to hold a significant market share due to its diverse product offerings in the Analog and Embedded Processing segments. Its competitive position is strong, given its established reputation and long-standing presence in the market since 1930.
Competitive Advantages
Texas Instruments (TXN) boasts strong competitive advantages in the semiconductor industry, primarily through its extensive product offerings and robust R&D capabilities. The company excels in both Analog and Embedded Processing segments, catering to diverse markets such as automotive, industrial, and personal electronics. Looking ahead, TXN is poised to launch innovative products that enhance energy efficiency and expand into new markets, particularly in electric vehicles and IoT applications. This strategic focus on emerging technologies positions Texas Instruments well for sustained growth and market leadership.
SWOT Analysis
The SWOT analysis below provides a strategic overview of Texas Instruments Incorporated (TXN) to assist in evaluating its market position and investment potential.
Strengths
- Strong market position
- Diverse product portfolio
- Robust R&D capabilities
Weaknesses
- Dependence on cyclical industries
- High competition
- Limited brand diversification
Opportunities
- Growth in IoT and AI markets
- Expansion in automotive sector
- Increasing demand for analog semiconductors
Threats
- Economic downturns
- Supply chain disruptions
- Rapid technological changes
Overall, Texas Instruments demonstrates a solid strategic position with strengths that leverage growth opportunities; however, it must navigate potential threats and weaknesses effectively to maintain its competitive edge. This analysis suggests a cautious yet optimistic approach for investors considering TXN.
Stock Analysis
Over the past year, Texas Instruments Incorporated (TXN) has experienced notable price movements, with key fluctuations reflecting the underlying trading dynamics. The stock has seen a general decline, particularly in recent months, which may have implications for investor sentiment and future performance.
Trend Analysis
Analyzing the overall trend for TXN over the past year, the stock has shown a percentage change of -5.3%. This indicates a bearish trend, despite some fluctuations in price. Notably, the highest price recorded was 221.25, while the lowest was 147.6. The trend is currently in a state of deceleration, suggesting that the negative momentum may not be as aggressive as it once was. The standard deviation of 16.75 indicates a moderate level of volatility.
In the recent trend analysis from August 31, 2025, to November 16, 2025, the stock saw a significant decline of -21.31%, reinforcing the bearish sentiment with a trend slope of -3.33. The standard deviation during this period was lower at 12.19, indicating less price variability compared to the overall trend.
Volume Analysis
Examining the trading volumes over the last three months, the average volume for TXN was approximately 38.1M, with average buy volume at 10.0M and average sell volume at 28.1M. This data suggests a seller-dominant behavior in the market, as indicated by the higher selling volumes. The volume trend is classified as bullish, with an acceleration in the volume slope of 1.26M, which could reflect increasing market participation despite the bearish price trend. This dynamic may suggest mixed investor sentiment, where sellers are more active, but the overall volume activity is rising.
Analyst Opinions
Recent analyst recommendations for Texas Instruments Incorporated (TXN) indicate a consensus to hold, with a rating of B from several analysts. For instance, analysts have highlighted strong return on equity and return on assets scores of 5, reflecting solid financial performance. However, concerns about price-to-earnings and price-to-book scores, which are lower at 2 and 1 respectively, suggest caution in valuation. Overall, while the company’s fundamentals are robust, the mixed ratings imply a careful approach for investors considering TXN in 2025.
Stock Grades
Texas Instruments Incorporated (TXN) has recently received updated stock ratings from several reputable grading companies. Below is a summary of the current grades:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Wells Fargo | maintain | Equal Weight | 2025-10-22 |
| Truist Securities | maintain | Hold | 2025-10-22 |
| Rosenblatt | maintain | Buy | 2025-10-22 |
| TD Cowen | maintain | Buy | 2025-10-22 |
| Cantor Fitzgerald | maintain | Neutral | 2025-10-22 |
| Stifel | maintain | Hold | 2025-10-22 |
| Goldman Sachs | maintain | Buy | 2025-10-22 |
| JP Morgan | maintain | Overweight | 2025-10-22 |
| Susquehanna | maintain | Positive | 2025-10-22 |
| Mizuho | downgrade | Underperform | 2025-10-20 |
Overall, the trend in grades for TXN shows a consistent sentiment among major analysts, with most maintaining their previous ratings. Notably, Mizuho has downgraded their grade to Underperform, which may indicate some caution in the market regarding Texas Instruments’ performance moving forward.
Target Prices
The consensus among analysts for Texas Instruments Incorporated (TXN) presents a balanced outlook.
| Target High | Target Low | Consensus |
|---|---|---|
| 245 | 145 | 190.45 |
Overall, the analyst expectations suggest a potential upside with a consensus target price of approximately 190.45, reflecting a moderate outlook for the stock.
Consumer Opinions
Consumer sentiment towards Texas Instruments Incorporated (TXN) reflects a blend of satisfaction and concern, showcasing the nuances of their product offerings.
| Positive Reviews | Negative Reviews |
|---|---|
| “Excellent product quality and reliability.” | “Customer service can be slow to respond.” |
| “Innovative technology solutions.” | “Pricing is often higher than competitors.” |
| “Great performance in embedded systems.” | “Limited support for certain legacy products.” |
Overall, consumer feedback on Texas Instruments highlights strengths in product quality and innovation, while concerns about customer service responsiveness and pricing competitiveness are recurring weaknesses.
Risk Analysis
In assessing Texas Instruments Incorporated (TXN), it’s crucial to identify potential risks that could affect investment decisions. Below is a summary of these risks.
| Category | Description | Probability | Impact |
|---|---|---|---|
| Market Volatility | Fluctuations in semiconductor demand can impact revenues. | High | High |
| Supply Chain Disruption | Global supply chain issues could delay production. | Medium | High |
| Regulatory Changes | New regulations affecting technology sectors could arise. | Medium | Medium |
| Technological Obsolescence | Rapid tech advancements may render products outdated. | High | High |
| Competition | Increased competition in the semiconductor industry may pressure margins. | High | Medium |
Synthesis: The most pressing risks for TXN are market volatility and technological obsolescence, both of which can significantly affect performance given the industry’s rapid pace and changing consumer demands.
Should You Buy Texas Instruments Incorporated?
Texas Instruments (TXN) has established itself with flagship products in the semiconductor industry, showcasing a robust net profit margin of 30.68%, a return on invested capital (ROIC) of approximately 45.23%, and a weighted average cost of capital (WACC) of 8%. The company benefits from strong competitive advantages such as its extensive patent portfolio and significant market share, although recent risks include fluctuations in demand and increasing competition.
Given the favorable financial metrics—particularly the positive net margin, a significantly higher ROIC than WACC, and a long-term upward trend in its performance—I find that Texas Instruments appears favorable for long-term investors. However, the current seller volumes suggest caution, and I would recommend waiting for buyer volumes to stabilize before making a commitment.
Specific risks related to Texas Instruments include ongoing competitive pressure, potential supply chain disruptions, and the inherent volatility of the semiconductor market.
Disclaimer: This article is not financial advice. Each investor is responsible for their own investment decisions.
Additional Resources
- Westwood Holdings Group Inc. Acquires 438,917 Shares of Texas Instruments Incorporated $TXN – MarketBeat (Nov 16, 2025)
- Bernstein Calls Turnaround At Texas Instruments Incorporated (TXN) Slow But Underway – Yahoo Finance (Nov 11, 2025)
- Texas Instruments Incorporated $TXN Stake Cut by Massachusetts Financial Services Co. MA – MarketBeat (Nov 16, 2025)
- Texas Instruments Incorporated (TXN) Is a Trending Stock: Facts to Know Before Betting on It – Yahoo Finance (Nov 12, 2025)
- Texas Instruments Incorporated $TXN Shares Sold by Allianz SE – MarketBeat (Nov 16, 2025)
For more information about Texas Instruments Incorporated, please visit the official website: ti.com
