Texas Instruments Stock Up 1.7x On The Back Of Strong Sales Growth
Texas Instruments Incorporated (NASDAQ: TXN) stock price rose more than 1.7x from $104 in 2017 end to around $179 currently, primarily due to favorable changes in its sales and P/S multiple. During this period, the company witnessed a strong 31% rise in revenues, and combined with a drop in its outstanding share count, revenue per share rose more than 40%. Additionally, over the same period, the S&P 500 returned around 55%, meaning that TXN stock managed to outperform the broader markets since 2017-end.
In our interactive dashboard, Why Texas Instruments Stock Moved: TXN Stock Has Gained 71% Since 2017, we break down the factors behind this move.
(A) Texas Instruments’ Total Revenue has grown 31% from $15 billion in FY 2017 to $19.6 billion on an LTM basis
- TI’s total revenue initially dropped from $15 billion in FY ’17 to as low as $14.4 billion in FY ’19, as the semiconductor supply glut hampered sales growth.
- However, revenues have bounced back since, and surged to $18.3 billion in FY ’21, currently standing even higher at $19.6 billion on an LTM basis.
- TI’s analog semiconductor segment brought in $14.05 billion in FY ’21, making up more than 75% of the company’s total sales.
- For additional details about TI’s revenues and comparison to peers, see Texas Instruments (TXN) Revenue Comparison
- How Will New iPads And Higher iPhone Pricing Help Apple Suppliers?
- With New iPhones Around The Corner, Are Apple Supplier Stocks A Buy?
- What’s The Outlook Like For Apple Vendors’ Stocks?
- What Has Driven Texas Instruments Stock Higher In Recent Years?
- Strong Sales Growth Has Helped Texas Instruments Stock Outperform The S&P
- What’s Behind Texas Instruments Stock’s Consistent Outperformance Of The Markets?
(B) Revenue per share (RPS) increased 42% from $14.95 in FY 2017 to $21.21 currently
- Texas Instruments revenue rose from $15 billion in 2017 to $19.6 billion currently, while the outstanding share count decreased from around 1 billion in 2017 to just a little over 900 million currently.
- Due to this, RPS has jumped from $14.95 in FY ’17 to $21.21 currently.
(C) Price-To-Sales (P/S) multiple for Texas Instruments rose strongly from 6.2x in 2017 end to 10x by 2020 end, but has pulled back to 8.4x currently, still around 35% higher than what it was in late 2017
- TI’s P/S multiple rose strongly to 10x by late 2020, on the back of rising investor expectations surrounding a revival in sales growth amidst rising demand for the company’s products.
- However, due to current geopolitical tensions and the increased economic uncertainty weighing on the broader markets, the P/S multiple has pulled back, currently standing at around 8.4x.
- For additional details about the company stock returns and comparison to peers, see Texas Instruments (TXN) Stock Return Comparison.
What if you’re looking for a more balanced portfolio instead? Our high-quality portfolio and multi-strategy portfolio have beaten the market consistently since the end of 2016.
| Returns | Aug 2022 MTD [1] |
2022 YTD [1] |
2017-22 Total [2] |
| TXN Return | 0% | -5% | 145% |
| S&P 500 Return | 0% | -13% | 84% |
| Trefis Multi-Strategy Portfolio | 0% | -14% | 240% |
[1] Month-to-date and year-to-date as of 8/1/2022
[2] Cumulative total returns since the end of 2016
Invest with Trefis Market Beating Portfolios
See all Trefis Price Estimates