Key Takeaways
- Quality scores 94/100 on a 42.6% operating margin and 35.2% return on equity, though free cash flow of $3.5 billion trails profit of about $6.1 billion as factory spending continues.
- Growth scores 49/100: trailing revenue growth of 22.8% marks a rebound from a -4.1% compound rate across the annual statements in the data.
- Opportunity scores 22/100, with a P/E of 43.84 and the $288.06 share price at the upper end of its $147.60 to $322.86 two-year range.
Texas Instruments, one of the largest makers of analog chips and a major supplier of embedded processors, is growing again after several years of shrinking sales. Yahoo Finance shows trailing revenue growth of 22.8% and earnings growth of 51.8%, and the company earns a 42.6% operating margin. But the shares trade at 43.84 times earnings, and heavy factory spending is holding back free cash flow. This Texas Instruments stock analysis, based on Yahoo Finance data as of October 14, 2026, explains why the scoring model rates the stock a Hold ahead of third-quarter results, which the company has scheduled for October 21.
What Is Happening With the Stock Price
Texas Instruments trades at $288.06, for a market value of $263.07 billion. Its two-year range runs from $147.60 to $322.86, which puts the shares at the upper end of that range: about 95% above the low and about 11% below the high. The rally reflects a recovery in demand for chips used in industrial equipment and cars. With the shares this far above their low, the October 21 results will test whether the recovery is strong enough to support the higher price.
Quality: Is This a Financially Sound Business?
Quality scores 94/100, the strongest pillar. The gross margin is 58.3%, the operating margin 42.6% and the net margin 31.1%. Return on equity is 35.2% and return on assets 13.1%. Debt-to-equity is 0.78, and a current ratio of 4.86 and quick ratio of 3.24 show plenty of liquidity.
Cash flow is the weak spot in this Texas Instruments stock analysis. A 31.1% net margin on $19.5 billion of revenue implies profit of about $6.1 billion, but trailing free cash flow is $3.5 billion. The gap reflects a multi-year program of building new 300-millimeter wafer factories. The dividend is also demanding: a 2.2% yield with a payout ratio of 85.5% means the dividend uses most of the company’s earnings, and on these figures it costs more than the free cash flow in the data. The strong balance sheet can cover that gap for a time, but it leaves little cash spare until spending on the new factories falls.
Growth: Does This Company Have Real Upside?
Growth scores 49/100. Yahoo’s trailing revenue growth figure of 22.8% contrasts sharply with a compound growth rate of -4.1% across the annual statements in the data, which shows how deep the downturn in analog chips was before this recovery. Trailing earnings growth of 51.8% reflects higher sales spread over a largely fixed cost base. The EV/Revenue multiple of 13.59 is high for a company whose revenue fell over the longer period, so the valuation assumes the recovery continues.
Opportunity: Is Now a Good Time to Enter?
Opportunity scores 22/100, the weakest pillar. The P/E of 43.84 on earnings per share of $6.57 and EV/EBITDA of 27.77 are high for a mature chipmaker, the price-to-book ratio is 14.61 and the free cash flow yield is 1.4%. With the shares at the upper end of their two-year range, the model finds little valuation support. The main risks are that industrial or automotive demand weakens again, that factory spending keeps cash flow low for longer than planned, that the high payout ratio limits flexibility, and that competition from lower-cost analog chipmakers increases.
Texas Instruments Stock Analysis: The Bottom Line
Our Texas Instruments stock analysis finds a highly profitable business in the early stages of a cyclical recovery, with a share price that already reflects much of it. Quality is 94/100, Growth 49/100 and Opportunity 22/100, for a recommendation score of 55/100 and a Hold signal, below the 60 the model needs for a Buy. The bull case is 22.8% revenue growth, a 42.6% operating margin and a strong balance sheet. The bear case is a P/E of 43.84, free cash flow of $3.5 billion that does not cover the dividend, and a longer record of falling revenue. The October 21 results could move the Growth and Opportunity scores in either direction. Buy / Hold / Sell reflects StreetBriefs’ quantitative scoring model (Quality, Growth, Opportunity), a data-driven signal for further research, not a personalized recommendation to transact.
Financial Metrics Summary
| Metric | Value |
|---|---|
| Price & Valuation | |
| Current Price | $288.06 |
| 2-Year Low | $147.60 |
| 2-Year High | $322.86 |
| Market Cap | $263.07B |
| P/E Ratio | 43.84 |
| EV / Revenue | 13.59 |
| Our Scores | |
| Quality Score | 94 / 100 |
| Growth Score | 49 / 100 |
| Opportunity Score | 22 / 100 |
| Profitability | |
| Earnings Per Share | $6.57 |
| Return on Assets | 13.1% |
| Return on Equity | 35.2% |
| Net Profit Margin | 31.1% |
| Gross Margin | 58.3% |
| Operating Margin | 42.6% |
| Growth | |
| Revenue Growth (5Y CAGR) | -4.1% |
| Revenue Growth (TTM) | 22.8% |
| Earnings Growth (TTM) | 51.8% |
| Balance Sheet | |
| Debt-to-Equity | 0.78 |
| Current Ratio | 4.86 |
| Quick Ratio | 3.24 |
| Income & Dividends | |
| Dividend Yield | 2.2% |
| Payout Ratio | 85.5% |
Data as of October 14, 2026
Our Three-Pillar Assessment
| Quality |
94/100 |
| Growth |
49/100 |
| Opportunity |
22/100 |
Quality measures business fundamentals: profitability, cash flow discipline, and balance sheet strength.
Growth captures revenue momentum, gross margin scalability, and the Rule of 40 efficiency test.
Opportunity signals entry timing: current valuation versus history and price position in the 2-year range.
Current price: $288.06 trading 11% below its 2-year high of $322.86.
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This analysis is done using financial data from Yahoo Finance.
Always conduct your own due diligence and consult a qualified financial advisor before making investment decisions.
