MMarketMath

TXN

Slow growerQuality: Medium (65/100)3 red flags

Texas Instruments · Information Technology · Semiconductors

$258.94

52w 152.73 – 334.03

20y monthly, adjusted

Mkt cap

$236.5B

P/E

48.3

P/FCF

92.7

FCF yield

1.1%

ROE

30.7%

Shldr yield

2.7%

div 2.1% + bb 0.6%

What today's price assumes

At $236.5B, the market is pricing in 28.8% annual free-cash-flow growth for the next decade (10% discount rate, 2.5% terminal growth). Over the last ten years, FCF actually grew -3.8% per year — the price asks for acceleration beyond the historical record.

Simple DCF per-share range: $25 · $25 · $31 (4% / base / optimistic growth). An estimate, not a target.

Adjust the assumptions yourself →

Historical multiple lens

At its own median P/OCF of 11.3× across 19 years, TXN would trade near $88/share (25th–75th percentile: $61–$133); it trades at 33.1× today.

Assumes the historical multiple regime persists — re-ratings can be permanent.

Growth record

Compound annual growth rates from as-filed 10-K data, split-adjusted

Rev 3y

−4.1%

Rev 5y

+4.1%

Rev 10y

+3.1%

EPS 5y

−1.8%

EPS 10y

+6.8%

FCF 5y

−13.9%

FCF 10y

−3.8%

Fundamentals

Fiscal 2007–2025, from SEC filings

Revenue

2007: $13.8B
2008: $12.5B
2009: $10.4B
2010: $14.0B
2011: $13.7B
2012: $12.8B
2013: $12.2B
2014: $13.0B
2015: $13.0B
2016: $13.4B
2017: $15.0B
2018: $15.8B
2019: $14.4B
2020: $14.5B
2021: $18.3B
2022: $20.0B
2023: $17.5B
2024: $15.6B
2025: $17.7B
$0$10.0B$20.0B
07
11
15
19
23

Net income

2007: $2.7B
2008: $1.9B
2009: $1.5B
2010: $3.2B
2011: $2.2B
2012: $1.8B
2013: $2.2B
2014: $2.8B
2015: $3.0B
2016: $3.6B
2017: $3.7B
2018: $5.6B
2019: $5.0B
2020: $5.6B
2021: $7.8B
2022: $8.7B
2023: $6.5B
2024: $4.8B
2025: $5.0B
$0$2.5B$5.0B$7.5B
07
11
15
19
23

Free cash flow

2007: $3.7B
2008: $2.6B
2009: $1.9B
2010: $2.6B
2011: $2.4B
2012: $2.9B
2013: $3.0B
2014: $3.7B
2015: $3.8B
2016: $4.1B
2017: $4.7B
2018: $6.1B
2019: $5.8B
2020: $5.5B
2021: $6.3B
2022: $5.9B
2023: $1.3B
2024: $1.5B
2025: $2.6B
$0$2.0B$4.0B$6.0B
07
11
15
19
23

Diluted shares (lower is better)

2007: 1.4B
2008: 1.3B
2009: 1.3B
2010: 1.2B
2011: 1.2B
2012: 1.1B
2013: 1.1B
2014: 1.1B
2015: 1.0B
2016: 1.0B
2017: 1.0B
2018: 990.0M
2019: 952.0M
2020: 933.0M
2021: 936.0M
2022: 926.0M
2023: 916.0M
2024: 919.0M
2025: 913.0M
0500.0M1.0B
07
11
15
19
23

Margins

20%40%60%07101316192225
Net marginFCF marginGross margin

Capital returned (dividends + buybacks)

2007: $425.0M
2008: $537.0M
2009: $567.0M
2010: $3.0B
2011: $2.6B
2012: $2.6B
2013: $4.0B
2014: $4.2B
2015: $4.2B
2016: $3.8B
2017: $4.7B
2018: $7.7B
2019: $6.0B
2020: $6.0B
2021: $4.4B
2022: $7.9B
2023: $4.8B
2024: $5.7B
2025: $6.5B
$0$2.0B$4.0B$6.0B
07
11
15
19
23

Cash vs long-term debt

$0$5.0B$10.0B07101316192225
CashLT debt

Quarterly

Discrete quarters from 10-Q filings; Q4 derived as fiscal year minus Q1–Q3. OCF is unwound from the year-to-date figures 10-Qs report. Compare to the same quarter a year ago — most businesses are seasonal.

Revenue by quarter

Q2'23: $4.5B
Q3'23: $4.5B
Q4'23: $4.1B
Q1'24: $3.7B
Q2'24: $3.8B
Q3'24: $4.2B
Q4'24: $4.0B
Q1'25: $4.1B
Q2'25: $4.4B
Q3'25: $4.7B
Q4'25: $4.4B
Q1'26: $4.8B
Q2'26: $5.5B
$0$2.0B$4.0B
23
24
24
25
26

Net income by quarter

Q2'23: $1.7B
Q3'23: $1.7B
Q4'23: $1.4B
Q1'24: $1.1B
Q2'24: $1.1B
Q3'24: $1.4B
Q4'24: $1.2B
Q1'25: $1.2B
Q2'25: $1.3B
Q3'25: $1.4B
Q4'25: $1.2B
Q1'26: $1.5B
Q2'26: $2.0B
$0$500.0M$1.0B$1.5B
23
24
24
25
26
QuarterRevenueYoYNet incomeYoYEPSOCF
Q2'26$5.5B+22.8%$2.0B+52.9%2.14$2.7B
Q1'26$4.8B+18.6%$1.5B+31.0%1.68$1.5B
Q4'25 *$4.4B+10.4%$1.2B−3.5%1.28$2.3B
Q3'25$4.7B+14.2%$1.4B+0.1%1.48$2.2B
Q2'25$4.4B+16.4%$1.3B+14.9%1.41$1.9B
Q1'25$4.1B+11.1%$1.2B+6.7%1.28$849.0M
Q4'24 *$4.0B−1.7%$1.2B−12.1%1.31$2.0B
Q3'24$4.2B−8.4%$1.4B−20.3%1.47$1.7B
Q2'24$3.8B−15.6%$1.1B−34.6%1.22$1.6B
Q1'24$3.7B−16.4%$1.1B−35.3%1.20$1.0B
Q4'23 *$4.1B−12.7%$1.4B−30.1%1.50$1.9B
Q3'23$4.5B−13.5%$1.7B−25.5%1.85$1.9B
Q2'23$4.5B−13.1%$1.7B−24.8%1.87$1.4B

Track record

Compound annual growth by period. For debt and share count, negative is the good direction.

Series3y5y10y15y
Revenue−4.1%+4.1%+3.1%+1.6%
Operating cash flow−6.4%+3.1%+5.0%+4.3%
Free cash flow−24.0%−13.9%−3.8%−0.0%
EPS (diluted)−16.6%−1.8%+6.8%+5.0%
Equity+3.7%+12.1%+5.0%+3.0%
LT debt+18.1%+16.7%+15.8%—
Diluted shares−0.5%−0.4%−1.3%−1.9%
Stock price+18.9%+9.3%+17.2%+19.7%

$100, 3 years ago

$168vs $176 in SPY

18.9% vs 20.7%/yr

$100, 5 years ago

$156vs $181 in SPY

9.3% vs 12.6%/yr

$100, 10 years ago

$489vs $412 in SPY

17.2% vs 15.2%/yr

$100, 15 years ago

$1,479vs $813 in SPY

19.7% vs 15.0%/yr

The $1 test — market value created per $1 of earnings retained (Buffett's hurdle: at least $1)

Last 5 years

$6.03

$62.1B created / $10.3B retained

Last 10 years

$7.29

$153.3B created / $21.0B retained

Quality & capital discipline

Cash-based returns and how management deploys capital

Cash ROIC

24.0%

OCF ÷ (equity + debt)

OCF / EV yield

2.8%

MC vs 10× OCF

3.38

≤1 = priced under 10× OCF

Debt / FCF

5.2y

SBC / FCF

16.1%

Owner earnings

$2.2B

OCF − capex − SBC

OE yield

0.9%

Share count 5y

−2.5%

per year; negative = buybacks

Capital intensity

69.7%

net PP&E ÷ revenue

Sales efficiency

$2.81

new PP&E per $1 new revenue, 5y

Growth engine (5y): reinvested 38.2% of operating cash flow at an incremental return of 7.1% — an organically fundable growth rate of about 2.7% per year (growth ≈ reinvestment rate × incremental ROIC).

Checklist

13 of 26 checks pass · 50%. Checks with structurally missing inputs are excluded.

Growth & Consistency

2/7

  • Revenue growth

    4.1% · 5y CAGR ≥ 5%

    fail

  • EPS growth

    -1.8% · 5y CAGR ≥ 5%

    fail

  • FCF growth

    -13.9% · 5y CAGR ≥ 5%

    fail

  • Revenue rises consistently

    6 of 9 · up in ≥ 7 of last 10 years

    fail

  • FCF consistently positive

    10 of 10 · positive in ≥ 8 of last 10 years

    pass

  • Profitable every year

    10 of 10 · net income > 0 in ≥ 8 of last 10

    pass

  • Cash flow keeps up with sales

    3.1% vs 4.1% · OCF CAGR ≥ 0.9× revenue CAGR

    fail

Profitability

6/7

  • Net margin

    28.3% · ≥ 8%

    pass

  • Operating margin

    34.1% · ≥ 10%

    pass

  • Gross margin stable or rising

    57.0% vs 68.8% · no drop > 2 pts over 3y

    fail

  • Return on equity

    30.7% · ≥ 12%

    pass

  • Cash ROIC

    24.0% · ≥ 12%

    pass

  • FCF margin

    14.7% · ≥ 5%

    pass

  • Earnings back their cash

    OCF $7.2B vs NI $5.0B · OCF ≥ net income (latest FY)

    pass

Balance Sheet

2/4

  • Debt payable from cash flow

    5.2y · LT debt ≤ 3× FCF

    fail

  • Cash cushion

    24% · cash ≥ 50% of LT debt

    fail

  • Leverage

    0.83 · LT debt ≤ 1.5× equity

    pass

  • Equity positive and compounding

    $16.3B · equity > 0 and grew over ~5y

    pass

  • Interest burden

    — · interest ≤ 15% of operating income

    na

Capital Allocation

2/4

  • Share count flat or shrinking

    -2.5% · ≤ +0.5%/yr over ~5y

    pass

  • Stock comp restrained

    16% · SBC ≤ 15% of FCF

    fail

  • Distributions funded by FCF

    249% · dividends + buybacks ≤ 100% of FCF

    fail

  • Repurchases are a habit

    10 of 10 · buybacks in ≥ 5 of last 10 years

    pass

Valuation Discipline

1/4

  • FCF yield

    1.1% · ≥ 3%

    fail

  • Earnings multiple

    48.3 · P/E ≤ 25

    fail

  • Price asks less than history delivered

    28.8% vs -3.8% · implied FCF growth ≤ historical FCF CAGR

    fail

  • Shareholder yield

    2.7% · dividends + buybacks ≥ 2% of market cap

    pass

Red flags

Mechanical checks — a flag is a question to investigate, not a verdict

Heavy debt load

Long-term debt exceeds 5 years of free cash flow.

Distributions exceed FCF

Dividends plus buybacks exceeded free cash flow in the latest fiscal year.

Margin compression

Gross margin has fallen by more than 5 points over the last three years.

Financial data

As filed in 10-Ks; per-share figures split-adjusted. $ in millions.

FYRevenueGross profitOp incomeNet incomeEPSOCFCapExFCFDividendsBuybacksSBCCashLT debtEquityShares
202517,68210,0836,0235,0015.457,1534,5502,6034,9991,4774193,22513,54816,273913
202415,6419,0945,4654,7995.206,3184,8201,4984,7959293873,20012,84616,903919
202317,51911,0197,3316,5107.076,4205,0711,3494,5572933622,96410,62416,897916
202220,02813,77110,1408,7499.418,7202,7975,9234,2973,6152893,0508,23514,577926
202118,34412,3768,9607,7698.268,7562,4626,2943,8865272304,6317,24113,333936
202014,4619,2695,8945,5955.976,1396495,4903,4262,5532243,1076,2489,187933
201914,3839,1645,7235,0175.246,6498475,8023,0082,9602172,4375,3038,907952
201815,78410,2776,7135,5805.597,1891,1316,0582,5555,1002322,4384,3198,994990
201714,9619,6146,0833,6823.615,3636954,6682,1042,5562421,6563,57710,3371,012
201613,3708,2574,8553,5953.484,6145314,0831,6462,1322521,1542,97810,4731,021
201513,0007,5754,3222,9862.824,3975513,8461,4442,7412861,0003,1209,9461,043
201413,0457,4273,9472,8212.574,0543853,6691,3232,8312771,1993,63010,3901,080
201312,2056,3642,8322,1621.913,3844122,9721,1752,8682871,6274,15810,8071,113
201212,8256,3681,9731,7591.513,4144952,9198191,8002631,4164,18610,9611,146
201113,7356,7722,9922,2361.883,2568162,4406441,9732699924,21110,9521,171
201013,9667,4924,5143,2282.623,8201,1992,6215922,4541901,319010,4371,213
200910,4274,9991,9911,4701.152,6437531,890567—1861,182—9,7221,269
200812,5016,2452,4371,9201.443,3307632,567537—2131,046—9,3261,321
200713,8357,3693,4972,6571.834,4076863,721425—2801,328——1,444

Some concepts are structurally absent for certain industries (banks report no gross profit or capex). Missing ≠ zero.

Compare with peers →·10-K filings on EDGAR ↗