Texas Instruments Incorporated (TXN): What Does Valuation Ratios Tell Us?


Texas Instruments Incorporated (NASDAQ:TXN) saw an upside of 2.99% to close Monday at $178.17 after adding $5.17 on the day. The 5-day average trading volume is 6,589,340 shares of the company’s common stock. It has gained $179.82 in the past week and touched a new high 1 time within the past 5 days. An average of 5,192,820 shares of the company has been traded in the last 20 days, and the 50-day average volume stands at 5,292,786.

TXN’s 1-month performance is 7.27% or $13.79 on its low of $160.83 reached on 12/28/22. The company’s shares have touched a 52-week low of $144.46 and high of $191.34, with the stock’s rally to the 52-week high happening on 01/12/23. YTD, TXN has achieved 7.84% or $12.95 and has reached a new high 6 times. However, the current price is down -6.88% from the 52-week high price.

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Insider Transactions

TXN stock investors last saw insider trading activity on Nov 16.CLARK JANET F (Director) most recently sold 9,990 shares at $175.16 per share on Nov 16. This transaction cost the insider $1,749,851. Sr. Vice President, BAHAI AHMAD, sold 1,109 shares at a price of $180.01 on Nov 11. Then, on Aug 01, Sr. Vice President Roberts Mark T. sold 2,048 shares at a price of $177.50 per share. This transaction amounted to $363,527.

Valuation Metrics

TXN stock has a beta of 1.01. Moving on to other valuation ratios, the trailing price-to-sales (P/S) ratio is 7.91 while the price-to-book (PB) in the most recent quarter is 11.21, with the price to cash flow ratio at 94.70.

Texas Instruments Incorporated’s quick ratio for the period ended September 29 was 4.10, with the current ratio over the same period at 4.90. As well, the company’s long term debt to equity for the quarter ending September 29 was 0.51, while the total debt to equity was 0.55. In terms of profitability, the gross margin trailing 12 months is 69.50%. The firm’s gross profit as reported stood at $12.38 billion against revenue of $18.34 billion.

Earnings Surprise

For the quarterly period ending September 29 this year, Texas Instruments Incorporated’s cash and short-term investments amounted to $5.92 billion against total debt of $7.94 billion. Net income and sales went up compared to those figures reported in the previous quarter. Net income grew 15.16% to $2.29 billion, while revenue of $2.29 billion was 0.17% off the previous quarter. Analysts expected TXN to announce $2.39 per share in earnings in its latest quarter, but it posted $2.47, representing a 3.30% surprise. EBITDA for the quarter stood at more than $2.94 billion. TXN stock balance sheet for the quarter ending September 29 shows that total liabilities totaled 11.55 billion, with total debt at $7.94 billion. Shareholders hold equity totaling $907.57 million.

Let’s look briefly at Texas Instruments Incorporated (TXN) price momentum from a technical analysis perspective. The 9-day relative strength index as at close on 23 January was 61.11% to suggest the stock is trending Neutral, with historical volatility in this time period at 23.17%.

The stock’s 5-day moving average is $174.25, reflecting a -0.47% or -$0.84 change from its current price. TXN is currently trading +5.59% above its 20-day SMA, +6.09% above its 100-day SMA. However, the stock’s current price level is away from the SMA50 by +5.98% and SMA200 by+0.56%.

Stochastic %K and %D was 62.25% and 59.38% and the average true range (ATR) pointed at 4.46. The RSI (14) points at 58.32%, while the 14-day stochastic is at 83.85% with the period’s ATR at 4.46. The stock’s 9-day MACD Oscillator is pointing at -2.15 and -0.03 on the 14-day charts.

Analyst Ratings

In the most recent analyst report for Texas Instruments Incorporated (NASDAQ: TXN), Truist reiterated its a Hold rating for the company but lifted their price target by $158 to $177. Analysts offering their rating for TXN stock have a consensus rating for the stock as Hold. Currently, 3 brokerage advisors rate TXN as a “sell,”, while 18 advise that investors “Hold.” 0 analysts have rated the stock as underweight. 1 rates the stock as overweight while 9 have offered a “buy” rating.

What is TXN’s price target for the next 12 months?

Analysts have a consensus price target ranging from a low of $140.00 and a high of $230.00, with their median price target at $176.00. Looking at these predictions, the average price target given by analysts is for Texas Instruments Incorporated (TXN) stock is $178.31.


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