Texas Instruments Incorporated (TXN) — Fundamental Analysis & Key Financial Ratios

Kaplio's reading: Texas Instruments Incorporated

Updated on October 22, 2026 · accounts published on October 21, 2026

Reading of October 21, 2026: A highly profitable chipmaker with a decade of strong returns and a recovering margin

Texas Instruments trades at a P/E of 43.3, 64 % above its ten-year median, with a 40.8 % operating margin over the last 12 months.

• Is Texas Instruments expensive or cheap? Texas Instruments trades at a P/E of 43.3, 64 % above its ten-year median and higher than 98 % of the last decade.
• How is the business doing? Revenue grew 13 % over the last 12 months and the operating margin of 40.8 % is back above its 2014-2025 average of 39.5 %.
• How strong is the balance sheet? Net debt was $12.16 per share in fiscal 2025, 4.3 % of the price, and the dividend has risen for 11 straight years.
• What to expect from the next earnings? Texas Instruments reports on January 26, 2027; analysts expect EPS of $2.31, below the $2.62 just reported.
• Does it grow with real cash or by diluting shareholders? Stock-based pay was just 2.4 % of revenue in fiscal 2025, but free cash flow was 14.7 % of sales, short of the 20 % bar.

Is Texas Instruments expensive or cheap?

Over the last 12 months Texas Instruments trades at a P/E of 43.3, against a ten-year median of 26.4 and a decade range of 15.0 to 49.1. It has traded cheaper 98 % of the time over that span, and the multiple sits 34 % above the sector median of 32.2. EV/EBITDA of 26.1× compares with a five-year average of 19.0×, past the 110 % line that marks it as expensive in technology. The free cash flow yield is 1.4 %. After a 61 % rise in 12 months, the market is paying for earnings growth that has not shown up yet.

How is the business doing?

The operating margin of 40.8 % over the last 12 months has recovered from 34.1 % in fiscal 2025 and is again above the 39.5 % average of fiscal 2014-2025. Revenue rose 13 % year on year, but EPS only 4.8 %, so profit is lagging sales. Returns on capital are the strong point: ROIC of 21.5 % is 13.3 points above the sector median of 8.1 %, and it has stayed above 10 % in each of the last ten fiscal years. The picture is of a high-quality company coming out of a weak stretch.

How strong is the balance sheet?

Debt is manageable. Net debt of $12.16 per share in fiscal 2025 equals 4.3 % of the current price and 1.5× EBITDA, inside the 2.0× considered tolerable for a semiconductor maker. A current ratio of 5.59 and an Altman Z of 8.7, in the safe zone, point to ample liquidity, and the Piotroski score is 7 of 9. The pressure point is the dividend: it yields 2.0 % and has grown for 11 consecutive fiscal years, but the payout reached 100 % of earnings in fiscal 2025, leaving little room for further raises unless profits climb.

What to expect from the next earnings?

On October 21, 2026 Texas Instruments reported EPS of $2.62 against $2.44 expected, a 7 % beat, and it has topped estimates in 6 of the last 8 quarters. The next report is due January 26, 2027, with consensus at $2.31, a step down from the last quarter. Estimates are steady: the 2026 EPS consensus edged up 0.5 % in the last 30 days, from $8.51 to $8.55 among 21 analysts, and the revenue forecast barely moved. Of 65 analysts, 31 say buy, 28 hold and 6 sell, a split view that fits a stretched multiple.

Does it grow with real cash or by diluting shareholders?

In technology, generic ratios miss what matters most: growth, pricing power and dilution through stock-based pay. Texas Instruments passes on dilution, with share-based compensation at 2.4 % of revenue in fiscal 2025, well under the 10 % healthy limit. A gross margin of 57 % in fiscal 2025 clears the 45 % mark for semiconductors, a sign of pricing power. Growth and cash conversion fall short: revenue per share fell 3.8 % a year over fiscal 2022-2025, against a healthy bar of 15 %, and free cash flow was 14.7 % of revenue, below the 20 % threshold.

How this was prepared: the data comes from companies' official filings, collected by a professional provider, and from Kaplio's analysis engine (trailing-12-month ratios, 10 years of history and sector medians computed across US-listed companies). The text is written from that data alone, every figure is checked against it before publication, and it is reviewed when the company reports results. This is not investment advice.