Texas Instruments Incorporated doesn’t just create semiconductors; it empowers a multitude of industries, from automotive to personal electronics, shaping the way we interact with technology daily. With a stronghold in both Analog and Embedded Processing, Texas Instruments is renowned for its innovative products and high-quality standards. As we analyze its current market position and performance, the pressing question remains: do the company’s fundamentals still justify its impressive valuation and growth trajectory?
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 designs, manufactures, and sells a broad range of semiconductor products, primarily through its two segments: Analog and Embedded Processing. Its Analog segment focuses on power management solutions and signal chain products, while the Embedded Processing segment offers microcontrollers and digital signal processors for various applications across industrial, automotive, and personal electronics markets. With a market cap of $166B, Texas Instruments operates globally and excels in delivering innovative solutions, reinforcing its strategic positioning in shaping the future of technology and electronics.
Fundamental Analysis
In this section, I will analyze Texas Instruments Incorporated’s income statement, financial ratios, and dividend payout policy to assess its overall financial health.
Income Statement
The following table presents the Income Statement for Texas Instruments Incorporated, showcasing key financial metrics over the past five fiscal years.
| 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 | 12.37B | 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 |
Interpretation of Income Statement
Over the past five years, Texas Instruments (TXN) exhibited fluctuating revenue, peaking at 20.03B in 2022, followed by a decline to 15.64B in 2024. Net income also saw a similar trend, decreasing from 8.75B in 2022 to 4.80B in 2024, reflecting the impact of rising costs and operational challenges. The gross profit margin has shown instability, suggesting pressure on pricing and cost control. In 2024, while revenue and net income decreased significantly, the margins remained relatively stable, indicating effective cost management despite lower sales volumes. This cautious approach to risk management remains essential for future performance.
Financial Ratios
The table below summarizes the financial ratios for Texas Instruments Incorporated (TXN) over the past years.
| Ratios | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|
| Net Margin | 42.35% | 43.68% | 37.16% | 30.68% |
| ROE | 58.27% | 60.02% | 38.53% | 28.39% |
| ROIC | 34.40% | 41.86% | 21.72% | 14.75% |
| P/E | 22.39 | 17.30 | 23.78 | 35.63 |
| P/B | 13.05 | 10.38 | 9.16 | 10.12 |
| Current Ratio | 5.33 | 4.70 | 4.55 | 4.12 |
| Quick Ratio | 4.58 | 3.77 | 3.35 | 2.88 |
| D/E | 0.62 | 0.62 | 0.66 | 0.80 |
| Debt-to-Assets | 33.25% | 33.37% | 34.69% | 38.29% |
| Interest Coverage | 48.70 | 47.38 | 20.77 | 10.76 |
| Asset Turnover | 0.74 | 0.74 | 0.54 | 0.44 |
| Fixed Asset Turnover | 3.57 | 2.91 | 1.75 | 1.38 |
| Dividend Yield | 2.23% | 2.84% | 2.94% | 2.80% |
Interpretation of Financial Ratios
Texas Instruments (TXN) exhibits strong liquidity, with a current ratio of 4.12 and a quick ratio of 2.88, indicating good short-term financial health. The solvency ratio stands at 0.34, suggesting a moderate level of debt relative to total assets, while the debt-to-equity ratio of 0.80 implies reasonable leverage. Profitability ratios are robust, highlighted by a net profit margin of 30.68% and an EBIT margin of 38.11%, indicating effective cost management. However, the high price-to-earnings ratio of 35.63 may suggest overvaluation, warranting caution. Overall, Texas Instruments shows solid financial health but requires careful monitoring of its market valuation.
Evolution of Financial Ratios
Over the past five years, Texas Instruments has demonstrated a generally positive trend in profitability and liquidity ratios. However, the significant increase in the price-to-earnings ratio indicates rising market expectations, suggesting potential overvaluation concerns that investors should watch closely.
Distribution Policy
Texas Instruments (TXN) has a robust dividend policy, reflected in its dividend payout ratio of approximately 99.9% in 2024. The annual dividend yield stands at 2.8%, and the company has consistently increased its dividend per share over recent years. Additionally, TXN engages in share buyback programs, aiming to enhance shareholder value, although the high payout ratio raises concerns about sustainability and potential risks related to over-distribution. Overall, these strategies seem aligned with long-term value creation, but caution is advised due to the high payout.
Sector Analysis
Texas Instruments Incorporated (TXN) is a leading player in the semiconductor industry, specializing in analog and embedded processing products, competing with firms like Analog Devices and NXP Semiconductors. Their competitive advantages include strong R&D capabilities and a diversified product lineup.
Strategic Positioning
Texas Instruments (TXN) holds a strong position in the semiconductor market, boasting a market cap of approximately $166B. The company primarily operates in two segments: Analog and Embedded Processing. Its Analog segment is particularly competitive, providing essential power management solutions and signal chain products, which cater to various industries, including automotive and industrial sectors. Despite facing competitive pressure from emerging tech firms and potential technological disruptions, TXN’s robust portfolio and strategic focus on innovation allow it to maintain a solid market share. The company’s beta of 0.994 suggests it exhibits market-level volatility, indicating a balanced risk profile for investors.
Revenue by Segment
The following chart illustrates Texas Instruments’ revenue distribution by segment for the fiscal year 2024, highlighting performance across key areas of their business.
In fiscal year 2024, Texas Instruments reported $12.16B in Analog and $2.53B in Embedded Processing. The Analog segment continues to dominate, though it shows a decline from $13.04B in 2023, reflecting a potential saturation in demand or competitive pressures. Embedded Processing also saw a decrease from $3.37B in 2023. The overall trend indicates a consolidation of revenue, emphasizing the importance of these segments while signaling potential risks related to market concentration and margin pressures in the upcoming year.
Key Products
Below is a table outlining Texas Instruments’ key products, along with a brief description of each.
| Product | Description |
|---|---|
| Analog Power Products | These products manage power requirements across various applications, including battery-management solutions and voltage regulators. |
| Signal Chain Products | This includes amplifiers, data converters, and motor drive products that facilitate the sensing and conditioning of signals for processing. |
| Microcontrollers | Utilized in electronic devices, these microcontrollers are essential for controlling various functions in industrial and consumer electronics. |
| Digital Signal Processors | These processors perform mathematical computations and are used in applications requiring complex signal processing. |
| DLP Products | Primarily used in projectors, these Digital Light Processing products help create high-definition images for various display applications. |
| Application-Specific Integrated Circuits (ASICs) | Customized integrated circuits designed for specific applications, offering enhanced performance and efficiency in electronics. |
In summary, Texas Instruments operates in the semiconductor industry, providing a diverse range of products that cater to various markets, including industrial, automotive, and personal electronics.
Main Competitors
The competitive landscape for Texas Instruments Incorporated (TXN) in the semiconductor industry includes several strong players with significant market capitalizations. Below is a table of the main competitors, including Texas Instruments, sorted by descending market cap:
| Company | Market Cap |
|---|---|
| Broadcom Inc. | 1.83T |
| Advanced Micro Devices, Inc. | 354.77B |
| Micron Technology, Inc. | 264.74B |
| QUALCOMM Incorporated | 187.22B |
| Intel Corporation | 182.12B |
| Texas Instruments Incorporated | 165.86B |
| Analog Devices, Inc. | 139.06B |
| Marvell Technology, Inc. | 85.28B |
| NXP Semiconductors N.V. | 57.37B |
| Microchip Technology Incorporated | 35.45B |
In summary, the main competitors for Texas Instruments are heavily focused in the North American and global semiconductor markets, with Broadcom leading the pack significantly in market capitalization. This competitive environment emphasizes the need for strategic innovation and market adaptability.
Competitive Advantages
Texas Instruments (TXN) boasts a strong competitive advantage through its extensive portfolio of analog and embedded processing semiconductors, which cater to diverse industries such as automotive, industrial, and personal electronics. With a market cap of $166B, the company is well-positioned to capitalize on the growing demand for power management solutions and smart technologies. Looking ahead, TXN is exploring new markets and product innovations, including advancements in microcontrollers and digital signal processors, aimed at enhancing efficiency and expanding its footprint in emerging sectors. This strategic focus on innovation and market expansion could provide significant growth opportunities in the coming years.
SWOT Analysis
The purpose of this analysis is to evaluate the key strengths, weaknesses, opportunities, and threats facing Texas Instruments Incorporated (TXN) to inform strategic decision-making.
Strengths
- Strong brand reputation
- Diverse product portfolio
- Robust R&D capabilities
Weaknesses
- High dependency on semiconductor market
- Market volatility
- Slow product cycle
Opportunities
- Growing demand in automotive sector
- Expansion in emerging markets
- Advancements in AI technology
Threats
- Intense competition
- Supply chain disruptions
- Regulatory challenges
Overall, the SWOT assessment indicates that Texas Instruments has a solid foundation and significant growth opportunities, especially in the automotive and AI sectors. However, it must navigate market volatility and competitive pressures to sustain its strategic advantage.
Stock Analysis
Over the past year, Texas Instruments Incorporated (TXN) has demonstrated notable price movements and trading dynamics, culminating in a significant bullish trend with a price increase of 10.72%.
Trend Analysis
Analyzing the stock’s performance over the past year, TXN has experienced a price change of +10.72%, indicating a bullish trend. Despite this overall positive movement, the recent trend from September 21, 2025, to December 7, 2025, shows a more modest increase of 1.77%. This recent trend is characterized by a slight deceleration, with the stock’s standard deviation recorded at 9.07, suggesting moderate volatility. The highest price reached during this period was $221.25, while the lowest was $147.60.
Volume Analysis
In the last three months, the total trading volume for TXN amounted to approximately 3.59B shares, with buyer volume accounting for 1.71B shares (47.74%) and seller volume at 1.85B shares. This indicates a seller-driven activity, especially in the recent period where buyer volume was 176.40M shares compared to seller volume of 295.35M shares. The overall volume trend is increasing, which suggests a growing market participation, albeit with a current seller dominance reflected in the buyer dominance percentage of 37.39%.
Analyst Opinions
Recent recommendations for Texas Instruments Incorporated (TXN) have been mixed but lean towards a cautious optimism. Analysts have assigned a “Buy” rating, with a score of 3, citing strong return on equity (5) and return on assets (5) as key strengths. Notably, the discounted cash flow analysis supports the positive outlook, despite a lower score in price-to-earnings (2) and price-to-book (1). Overall, the consensus for TXN remains a “Buy” for the current year, reflecting confidence in its financial health and growth potential.
Stock Grades
Texas Instruments Incorporated (TXN) has received various grades from reputable grading companies, indicating a generally stable outlook. Below is a summary of the most recent stock ratings:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Susquehanna | maintain | Positive | 2025-10-22 |
| Wells Fargo | maintain | Equal Weight | 2025-10-22 |
| Truist Securities | maintain | Hold | 2025-10-22 |
| Rosenblatt | maintain | Buy | 2025-10-22 |
| Goldman Sachs | maintain | Buy | 2025-10-22 |
| JP Morgan | maintain | Overweight | 2025-10-22 |
| Cantor Fitzgerald | maintain | Neutral | 2025-10-22 |
| Stifel | maintain | Hold | 2025-10-22 |
| TD Cowen | maintain | Buy | 2025-10-22 |
| Mizuho | downgrade | Underperform | 2025-10-20 |
Overall, the trend in grades for TXN reflects a consensus among analysts to maintain their positions, with several firms continuing to issue “Buy” ratings. However, Mizuho’s recent downgrade to “Underperform” is a noteworthy deviation that could signal caution for potential investors.
Target Prices
The consensus target prices for Texas Instruments Incorporated (TXN) reflect a range of analyst expectations.
| Target High | Target Low | Consensus |
|---|---|---|
| 245 | 145 | 190.45 |
Overall, analysts anticipate a moderate growth potential for TXN, with a consensus price suggesting a balanced outlook.
Consumer Opinions
Consumer sentiment regarding Texas Instruments Incorporated (TXN) reflects a balanced mix of appreciation and criticism, providing valuable insights into the company’s performance.
| Positive Reviews | Negative Reviews |
|---|---|
| Excellent product quality and reliability. | High prices compared to competitors. |
| Strong customer support and service. | Limited innovation in recent products. |
| User-friendly technology and interfaces. | Supply chain issues affecting availability. |
| Consistent performance in stock growth. | Occasional software bugs reported. |
Overall, consumer feedback on Texas Instruments is largely positive, with strengths in product quality and customer service, while concerns about pricing and innovation persist.
Risk Analysis
In this section, I will outline the key risks associated with Texas Instruments Incorporated (TXN) to help investors make informed decisions.
| Category | Description | Probability | Impact |
|---|---|---|---|
| Market Risk | Volatility in semiconductor demand can affect revenue. | High | High |
| Operational Risk | Supply chain disruptions may hinder production. | Medium | High |
| Regulatory Risk | Changes in trade policies could impact operations. | Medium | Medium |
| Technological Risk | Rapid technological advancements may outpace TXN. | High | Medium |
| Competition Risk | Increasing competition from rivals could squeeze margins. | High | High |
Considering the semiconductor industry’s cyclical nature, market and competition risks are particularly significant for TXN, as they can greatly influence financial performance.
Should You Buy Texas Instruments Incorporated?
Texas Instruments Incorporated (TXN) has demonstrated strong profitability, with a net profit margin of 30.68% and a return on invested capital (ROIC) of 14.75%, which exceeds its weighted average cost of capital (WACC) of 8.03%, indicating value creation. The company carries total debt of 13.6B, resulting in a debt-to-equity ratio of 0.81, which may suggest moderate financial risk. Over the years, TXN has shown positive fundamental growth, and it currently holds a rating of B, suggesting a favorable outlook in the market.
Favorable signals
I have identified several favorable elements in the data for Texas Instruments Incorporated. The company demonstrates a strong gross margin of 58.14%, an impressive EBIT margin of 38.11%, and a positive net margin of 30.68%. Additionally, the return on equity (ROE) stands at 28.39%, and the return on invested capital (ROIC) is 14.75%, which indicates value creation as it exceeds the weighted average cost of capital (WACC) of 8.03%. Furthermore, the interest coverage ratio is 11.73, and the dividend yield is 2.8%, both reflecting positive financial health.
Unfavorable signals
There are several unfavorable elements present in the data for Texas Instruments Incorporated. The company has experienced a revenue growth decline of 10.72% and a gross profit growth decrease of 17.47%. The operating expense compared to revenue growth is also down by 10.72%, and the EBIT growth has fallen by 23.29%. Additionally, the earnings per share (EPS) growth is down by 26.45%. The price-to-earnings (P/E) ratio is 35.63, indicating potential overvaluation, and the current ratio of 4.12 may suggest inefficiencies in asset utilization.
Conclusion
Given the favorable income statement indicators and a favorable global ratios evaluation, Texas Instruments Incorporated may appear favorable for long-term investors. However, the recent seller volume exceeding the buyer volume suggests that it might be prudent to wait for buyers to return before making any investment decisions.
Disclaimer: This article is not financial advice. Each investor is responsible for their own investment decisions.
Additional Resources
- Stenger Family Office LLC Invests $1.94 Million in Texas Instruments Incorporated $TXN – MarketBeat (Dec 06, 2025)
- Texas Instruments Incorporated’s (NASDAQ:TXN) Stock Is Going Strong: Have Financials A Role To Play? – Yahoo Finance (Dec 03, 2025)
- Texas Instruments Incorporated (TXN): A Bull Case Theory – Insider Monkey (Dec 05, 2025)
- Wall Street analysts tout Texas Instruments Incorporated (TXN) growth prospects amid weak guidance – MSN (Dec 05, 2025)
- 12,384 Shares in Texas Instruments Incorporated $TXN Purchased by Royal Fund Management LLC – MarketBeat (Dec 05, 2025)
For more information about Texas Instruments Incorporated, please visit the official website: ti.com
