TXN Stock Risk & Deep Value Analysis
Texas Instruments Inc
Technology • Semiconductors
DVR Score
out of 10
What You Need to Know About TXN Stock
We analyzed Texas Instruments Inc using our deep value framework. Sign in to see our full verdict and DVR Score.
We ran TXN through our deep value framework — analyzing financial health, distress signals, competitive moat, and risk factors. Our risk assessment: Moderate-Conservative. Here's what we found.
TXN Risk Analysis & Red Flags
What Could Go Wrong
The primary risk for TXN is a prolonged or deeper-than-expected cyclical downturn in its key industrial and automotive end markets. This could lead to sustained revenue contraction, inventory build-up, and pressure on gross margins, impacting free cash flow and dividend growth expectations.
Risk Matrix
Overall
Moderate-Conservative
Financial
Low
Market
Medium
Competitive
Medium
Execution
Low
Regulatory
Low
Red Flags
- ⚠
Slowing industrial demand, which accounts for a significant portion of revenue, impacting near-term growth.
- ⚠
Market rotation towards AI-driven semiconductors, where TXN's core offerings are less directly positioned for exponential growth.
Upcoming Risk Events
- 📅
Protracted weakness or further decline in industrial demand
- 📅
Any negative surprises in Q1 2026 earnings guidance
When to Reconsider
- 🚪
Sustained quarterly revenue declines for more than two consecutive quarters without clear signs of recovery.
- 🚪
Significant erosion of gross margins below 50% for multiple quarters.
- 🚪
Reduction or stagnation of the dividend for more than a year.
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What Does Texas Instruments Inc (TXN) Do?
Market Cap
$194.03B
Sector
Technology
Industry
Semiconductors
Employees
34,000
Texas Instruments Incorporated designs, manufactures, and sells semiconductors to electronics designers and manufacturers in the United States, China, rest of Asia, Europe, Middle East, Africa, Japan, and internationally. The company operates through Analog and Embedded Processing segments. The Analog segment offers power products to manage power requirements across various voltage levels, including battery-management solutions, DC/DC switching regulators, AC/DC and isolated controllers and converters, power switches, linear regulators, voltage references, and lighting products. This segment provides signal chain products that sense, condition, and measure signals to allow information to be transferred or converted for further processing and control, including amplifiers, data converters, interface products, motor drives, clocks, and logic and sensing products. The Embedded Processing segment offers microcontrollers, processors, wireless connectivity, and radar products; and applications processors for specific computing activity. This segment offers products for use in various markets, such as industrial, automotive, personal electronics, communications equipment, enterprise systems, calculators, and others. It provides DLP products primarily for use in project high-definition images; calculators; and application-specific integrated circuits. The company markets and sells its semiconductor products through direct sales and distributors, as well as through its website. Texas Instruments Incorporated was founded in 1930 and is headquartered in Dallas, Texas.
Visit Texas Instruments Inc WebsiteInvestment Thesis
Texas Instruments is a defensive, high-quality semiconductor investment, offering stability, strong free cash flow, and a growing dividend. Its strategic focus on the secular growth of industrial and automotive markets, combined with manufacturing cost advantages, positions it as a long-term hold for capital preservation and income, rather than aggressive growth. The current weakness in industrial demand presents a potential entry point for patient investors.
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TXN Price Targets & Strategy
12-Month Target
$235.00
Bull Case
$260.00
Bear Case
$195.00
Valuation Basis
Based on a 25x forward P/E applied to an estimated FY26 EPS of $9.40 (implied by typical ~25x P/E for TXN and recent price targets)
Entry Strategy
Consider dollar-cost averaging near the current level or on dips towards $200-$210, which could act as a support zone after the recent rally.
Exit Strategy
For long-term holders, no specific exit target beyond re-evaluating if fundamentals significantly deteriorate. Short-term traders might consider profit-taking above $250. Stop loss below $190.
Portfolio Allocation
2-4% for a conservative to moderate risk tolerance, primarily for income and stable capital appreciation.
Price Targets & Strategy
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Is TXN Financially Healthy?
Valuation
P/E Ratio
38.80
Forward P/E
17.05
EV/EBITDA
25.53
PEG Ratio
-6.48
Price/Book
12.01
Price/Sales
10.10
Profitability
Gross Margin
57.02%
Operating Margin
34.06%
Net Margin
28.28%
Return on Equity
30.44%
Revenue Growth
13.05%
EPS
$5.48
Balance Sheet
Current Ratio
4.35
Quick Ratio
2.17
Debt/Equity
0.86
Total Debt
$5.20B
Cash & Equivalents
$8.10B
Cash Flow
Operating Cash Flow
$5.80B
Free Cash Flow
$3.20B
EBITDA
$8.04B
Other
Beta (Volatility)
1.06
Dividend Yield
2.65%
Does TXN Have a Competitive Moat?
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🏰 Wide
Moat Trend
Stable
Moat Sources
4 Identified
Texas Instruments benefits from significant cost advantages through its 300mm wafer production, which is a capital-intensive and difficult-to-replicate asset. Its extensive portfolio of proprietary analog and embedded processing intellectual property is critical for specialized, high-performance applications. Furthermore, the deep integration of its chips into industrial and automotive systems creates high switching costs for customers, ensuring long-term demand.
Moat Erosion Risks
- •Aggressive pricing by competitors, particularly in more commoditized segments.
- •Rapid technological shifts or disruptive innovation that bypasses TXN's core IP, though unlikely in its core analog space.
- •Significant macroeconomic downturns impacting capital expenditures in industrial and automotive sectors.
TXN Competitive Moat Analysis
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TXN Market Intelligence
Sentiment & Insider Activity
Social Sentiment
Neutral (primarily institutional interest rather than retail hype due to its mature profile)
Institutional Sentiment
Neutral (predominantly 'Hold' rating, with a recent upgrade from Stifel to 'Buy' suggesting some cautious optimism)
Insider Activity (Form 4)
SVP Abraham Tsedeniya filed an initial Form 3, disclosing holdings of 21,562 common shares and various non-qualified stock options. SVP Hagop Kozanian announced retirement effective August 31, 2026. No Form 4 buy/sell transactions were reported in the last 90 days for key executives, indicating normal activity.
Options Flow
Normal options activity (no specific data provided to indicate unusual institutional positioning).
Earnings Intelligence
Next Earnings
2026-04-22
Surprise Probability
Medium
Historical Earnings Pattern
TXN typically reports consistent results with conservative guidance. The stock price reaction is often more sensitive to forward guidance and commentary on end-market demand than to slight beats or misses on current quarter figures.
Key Metrics to Watch
Competitive Position
Top Competitor
Analog Devices (ADI)
Market Share Trend
Stable in its core analog and embedded processing markets, leveraging its manufacturing scale and broad product portfolio. However, facing headwinds in industrial segment demand.
Valuation vs Peers
TXN generally trades at a premium P/E multiple compared to many peers due to its superior gross margins, free cash flow generation, and dividend growth, despite slower revenue growth.
Competitive Advantages
- •Proprietary analog and embedded processing IP and broad product portfolio.
- •Cost advantage from large-scale 300mm wafer manufacturing strategy.
- •Deep, long-standing customer relationships and high switching costs in industrial and automotive applications.
Market Intelligence
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What Could Drive TXN Stock Higher?
Near-Term (0-6 months)
- •Q1 2026 Earnings Report (April 22, 2026)
- •2026 Annual Stockholder Meeting (April 16, 2026)
Medium-Term (6-18 months)
- •Recovery in industrial and automotive end-market demand
- •Continued ramp-up and cost efficiencies from 300mm wafer fabs
Long-Term (18+ months)
- •Increased semiconductor content in automotive electrification and industrial automation
- •Expansion into new niche markets requiring proprietary analog and embedded solutions
Catalysts & Growth Drivers
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What's the Bull Case for TXN?
- ✓
Signs of recovery in industrial and automotive end-market bookings and revenue growth.
- ✓
Continued expansion of free cash flow per share.
- ✓
Sustained gross margin performance above 58%.
Bull Case Analysis
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Competing with TXN
See how Texas Instruments Inc compares to related companies
| Company | Market Cap | DVR Score | P/E | Revenue | Profit Margin | Rev Growth | |
|---|---|---|---|---|---|---|---|
Texas Instruments Inc TXN | $194.0B | 0.1 | 38.8 | $16.1B | 28.3% | 13.1% | |
Apple Inc AAPL | $3.9T | 1.5 | 33.2 | $391.0B | 27.0% | 10.1% | Compare → |
Alphabet Inc GOOGL | $4.2T | 1.0 | 31.5 | $402.8B | 32.8% | 15.1% | Compare → |
Meta Platforms Inc META | — | 5.1 | 15.7 | — | 30.1% | 22.2% | Compare → |
Microsoft Corp MSFT | — | 0.5 | — | — | — | — | Compare → |
NVIDIA Corp NVDA | $4.4T | 5.3 | 38.5 | $215.9B | 55.6% | 65.0% | Compare → |
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How Texas Instruments Inc Makes Money
Texas Instruments designs, manufactures, and sells analog and embedded processing semiconductors to a broad range of global customers. Its chips are essential components found in everything from industrial equipment and automotive systems to personal electronics and communications infrastructure. The company leverages its proprietary technology and efficient manufacturing scale to deliver critical components that enable innovation and increase efficiency across diverse applications, generating revenue primarily through the sale of these specialized integrated circuits.
Read Full Business Model BreakdownFAQ
What is the DVR Score for Texas Instruments Inc (TXN)?
As of April 13, 2026, Texas Instruments Inc has a DVR Score of 0.1 out of 10, placing it in the "Distressed" category. This score is generated by our AI-powered deep value analysis framework that evaluates growth potential, financial health, competitive moat, and risk factors.
What is the market capitalization of Texas Instruments Inc?
Texas Instruments Inc's market capitalization is approximately $194.0B. The company operates in the Technology sector within the Semiconductors industry.
What ticker symbol does Texas Instruments Inc use?
TXN is the ticker symbol for Texas Instruments Inc. The company trades on the NMS.
What is the risk level for TXN stock?
Our analysis rates Texas Instruments Inc's overall risk as Moderate-Conservative. This assessment considers execution risk, market risk, financial risk, competitive risk, and regulatory risk. For a full breakdown, see the risk analysis section above.
What is the P/E ratio of TXN?
Texas Instruments Inc currently has a price-to-earnings (P/E) ratio of 38.8. This is above the market average, suggesting the stock may be priced for high growth expectations.
Does Texas Instruments Inc pay a dividend?
Yes, Texas Instruments Inc pays a dividend with a current yield of approximately 2.65%.
Is Texas Instruments Inc's revenue growing?
Texas Instruments Inc has reported revenue growth of 13.1%. The company is showing strong top-line momentum.
Is TXN stock profitable?
Texas Instruments Inc has a profit margin of 28.3%. This indicates strong profitability.
How often is the TXN DVR analysis updated?
Our AI-powered analysis of Texas Instruments Inc is refreshed regularly to incorporate the latest financial data, market conditions, and news. The most recent update was on April 13, 2026.
Important Disclaimer – Not Financial Advice
Deep Value Reports is an independent research platform for educational and informational purposes only. We are not financial advisors, investment advisors, or licensed professionals. The analysis, scores, and information provided on this page for TXN (Texas Instruments Inc) should not be construed as personalized investment advice, a recommendation to buy or sell any security, or an offer to provide investment advisory services.
All investments involve risk, including the potential loss of principal. Past performance does not guarantee future results. Always conduct your own research, consider your financial situation, and consult with a qualified financial advisor before making any investment decisions.