Texas Instruments Incorporated (NASDAQ: TXN) stock price grew more than 1.8x from around $94 in 2018 end to over $170 currently, primarily due to favorable changes in its P/S multiple. This does not come as a surprise, as the company has also witnessed a rise in revenue over this period, and revenue per share has risen, helped by a slight decrease in the outstanding share count.
In our interactive dashboard, Why Texas Instruments Stock Moved: TXN Stock Has Gained 82% Since 2018, we break down the factors behind this move.
(A) TXN’s Total Revenue has grown 16% from $15.8 billion in 2018 to $18.3 billion on an LTM basis
- TXN’s total revenue first dropped from $15.8 billion in FY ’18 to $14.5 billion in FY ’20, due to the semiconductor supply glut and the pandemic further hurting demand.
- Revenues then jumped to $18.3 billion in the most recent FY ’21 earnings as demand for TI’s semiconductors has risen.
- Analog semiconductor sales make up the bulk of TI’s revenues, with $14.1 billion of the company’s sales coming from this segment as of FY ’21, making up more than 75% of total revenue.
- For details about TXN revenues and comparison to peers, see Texas Instruments (TXN) Revenue Comparison
- How Has Texas Instruments Stock Managed To Outperform The Markets Since ’18?
- Here’s What Makes Microchip Technology Stock A Strong Semiconductor Play
- After A Dismal Performance Last Month, Texas Instruments Stock Looks Set To Bounce
- Thinking Of Buying Intel Stock? Buy Texas Instruments Instead
- Despite Recent Earnings Growth, Texas Instruments Stock Could Drop To $165
- Strong Earnings Growth Could Push Texas Instruments Stock To Recent High Of $198
(B) Revenue per share (RPS) increased 22% from $16.15 in 2018 to $19.73 currently
- TXN revenue rose from $15.8 billion in 2018 to $18.3 billion currently, while the outstanding share count decreased from 977 million in 2018 to around 930 million currently.
- Due to this, RPS has risen strongly from $16.15 in FY ’18 to $19.73 currently.
(C) Price-To-Sales (P/S) multiple for TXN rose steadily from 5.5x in 2018 to 10.5x in 2020, but stands at 8.7x currently, still more than 1.5x higher than its 2018 level
- Due to rising expectations of TXN’s sales recovery since the pandemic, its P/S multiple rose steadily to over 10x in 2020.
- However, amidst current geopolitical tensions dragging down the broader markets, the P/S multiple has pulled back and currently stands at a little under 9x.
- For additional details about the company’s historical returns and comparison to peers, see Texas Instruments (TXN) Stock Return.
What if you’re looking for a more balanced portfolio instead? Here’s a high-quality portfolio that’s beaten the market consistently since the end of 2016.
|S&P 500 Return||-2%||-10%||91%|
|Trefis MS Portfolio Return||-3%||-13%||244%|
 Month-to-date and year-to-date as of 3/10/2022
 Cumulative total returns since the end of 2016
Invest with Trefis Market Beating Portfolios
See all Trefis Price Estimates