Parkev Tatevosian, CFA 对 $TXN 的判断变化

Texas Instruments will be the latest semiconductor company to implement price increases. Already business is booming and the management team reported 23% growth in revenue up to 5.5 billion in its most recently completed quarter. Profit margins increased by 300 basis points up to 61% on the gross margin line.

But does all of this make Texas Instruments stock a buying opportunity? Let's take a closer look and answer that question. Looking at Texas Instruments chart of revenue over the previous decade demonstrates very clearly the cyclical nature of the semiconductor industry. Revenue grows, revenue falls, and that cycle repeats itself over many years.

Trailing 12-month revenue at 19.5 billion has almost reached its previous peak and is likely to continue from here. The business is firing on all cylinders. The electric vehicle industry is creating more demand for Texas Instruments products as consumers are looking to EVs and hybrid vehicles to offset some of the higher costs from higher gas prices.

Additionally, the changing structure of power support for data centers is also a support for demand for Texas Instruments. They mentioned they are working on price increases, but these are not general price increases. Texas Instruments is working on a customer-by-customer basis, negotiating price increases across the board. Management said that this process will likely continue till the rest of this year and probably for the first half of next year as well.

But what's impressive is even during the down times, Texas Instruments operating profit margin still was 34%. Many companies would envy an operating profit margin of 34% even at their peak. Texas Instruments generates 34% operating margins at their bottom. That's impressive.

At its best, Texas Instruments generated a 53% operating margin, and it wouldn't surprise me if their operating margins approach those levels during the peak levels of revenue if the company reaches those levels over these next 24 to 36 months.

Similarly, its returns on invested capital have been cyclical, but even at their low point, it was above the company's weighted average cost of capital. At the high point at over 40%, that's roughly four times its weighted average cost of capital.

So when you're approaching two to one, three to one, four to one like Texas Instrument approaches, that's a very good number in return on invested capital. So we've seen so far evaluating the company's performance metrics, a well-managed company that's able to generate great profits even during cyclical downturns. And during cyclical upturns, they really capitalize on their operating leverage.

So I wanted to see valuation that's hopefully not too expensive and it's hopefully still a buying opportunity. So, when measuring on a forward price to earnings basis, it's trading at 24, which to me looks like an attractive valuation for a business that's still in the early stages of its cyclical upturn.

I also updated my discounted cash flow valuation for the company today and I calculated a fair value of $252. That's very close to its current market price of $259 and well within my margin of safety.

So, for this stock comprehensively, I would say that it's slightly undervalued. My DCF shows a business that's fairly valued and the forward PE multiple shows a price that's undervalued.

Texas Instruments is a stock that I ranked as a buying opportunity on April 13th, 2026 with a medium conviction level. And today, after evaluating the company's latest performance and comparing it against its latest valuation, I will reiterate that buy ranking with a medium conviction level.