Texas Instruments Stock To $136?
Texas Instruments (TXN) stock has fallen 5.6% during the past day, and is currently trading at $170.71. Our machine-driven multi-factor assessment suggests that it may be time to reduce exposure to TXN stock. We are primarily concerned current valuation and a price of $136 may not be out of reach. We believe there are only a couple of things to fear in TXN stock given its overall Strong operating performance and financial condition. But given its Very High valuation, the stock appears Relatively Expensive.
Below is our assessment:
| CONCLUSION | |
|---|---|
| What you pay: | |
| Valuation | Very High |
| What you get: | |
| Growth | Inconsistent |
| Profitability | Very Strong |
| Financial Stability | Very Strong |
| Downturn Resilience | Moderate |
| Operating Performance | Strong |
| Stock Opinion | Relatively Expensive |
TXN stock has fallen meaningfully recently and we currently find it relatively expensive. While this may feel like an opportunity, there is significant risk in relying on a single stock. On the other hand, there is a huge value to a broader diversified approach. If you seek an upside with less volatility than holding an individual stock, consider the High Quality Portfolio (HQ) – HQ has outperformed its benchmark – a combination of S&P 500, Russell, and S&P midcap index, and achieved returns exceeding 105% since its inception. Risk management is key – consider, what could long-term portfolio performance be if you blended 10% commodities, 10% gold, and 2% crypto with HQ’s performance metrics.
Let’s get into details of each of the assessed factors but before that, for quick background: With $155 Bil in market cap, Texas Instruments provides semiconductors including power management products and microcontrollers for electronics designers, operating in analog and embedded processing segments.
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[1] Valuation Looks Very High
| TXN | S&P 500 | |
|---|---|---|
| Price-to-Sales Ratio | 9.3 | 3.3 |
| Price-to-Earnings Ratio | 30.7 | 24.5 |
| Price-to-Free Cash Flow Ratio | 102.9 | 21.2 |
This table highlights how TXN is valued vs broader market. For more details see: TXN Valuation Ratios
[2] Growth Is Inconsistent
- Texas Instruments has seen its top line shrink at an average rate of -4.9% over the last 3 years
- Its revenues have grown 3.6% from $16 Bil to $17 Bil in the last 12 months
- Also, its quarterly revenues grew 16.4% to $4.4 Bil in the most recent quarter from $3.8 Bil a year ago.
| TXN | S&P 500 | |
|---|---|---|
| 3-Year Average | -4.9% | 5.4% |
| Latest Twelve Months* | 3.6% | 5.2% |
| Most Recent Quarter (YoY)* | 16.4% | 6.1% |
This table highlights how TXN is growing vs broader market. For more details see: TXN Revenue Comparison
[3] Profitability Appears Very Strong
- TXN last 12 month operating income was $5.8 Bil representing operating margin of 34.9%
- With cash flow margin of 38.6%, it generated nearly $6.4 Bil in operating cash flow over this period
- For the same period, TXN generated nearly $5.0 Bil in net income, suggesting net margin of about 30.2%
| TXN | S&P 500 | |
|---|---|---|
| Current Operating Margin | 34.9% | 18.6% |
| Current OCF Margin | 38.6% | 20.4% |
| Current Net Income Margin | 30.2% | 12.7% |
This table highlights how TXN profitability vs broader market. For more details see: TXN Operating Income Comparison
[4] Financial Stability Looks Very Strong
- TXN Debt was $14 Bil at the end of the most recent quarter, while its current Market Cap is $155 Bil. This implies Debt-to-Equity Ratio of 9.1%
- TXN Cash (including cash equivalents) makes up $5.4 Bil of $35 Bil in total Assets. This yields a Cash-to-Assets Ratio of 15.3%
| TXN | S&P 500 | |
|---|---|---|
| Current Debt-to-Equity Ratio | 9.1% | 21.1% |
| Current Cash-to-Assets Ratio | 15.3% | 7.0% |
[5] Downturn Resilience Is Moderate
TXN saw an impact slightly better than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.
2022 Inflation Shock
- TXN stock fell 30.2% from a high of $201.29 on 21 October 2021 to $140.50 on 30 October 2023 vs. a peak-to-trough decline of 25.4% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 22 May 2024
- Since then, the stock increased to a high of $221.25 on 13 July 2025 , and currently trades at $170.71
| TXN | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -30.2% | -25.4% |
| Time to Full Recovery | 205 days | 464 days |
2020 Covid Pandemic
- TXN stock fell 30.4% from a high of $134.25 on 23 January 2020 to $93.50 on 16 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 20 July 2020
| TXN | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -30.4% | -33.9% |
| Time to Full Recovery | 126 days | 148 days |
2008 Global Financial Crisis
- TXN stock fell 64.9% from a high of $39.18 on 17 July 2007 to $13.77 on 2 March 2009 vs. a peak-to-trough decline of 56.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 25 July 2013
| TXN | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -64.9% | -56.8% |
| Time to Full Recovery | 1606 days | 1480 days |
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