TXN
Texas Instruments Incorporated
Technology · Semiconductors · United States · Stock
Score Breakdown
Scored for Safe Long-Term Investing profile
Sub-scores are 0–20 each; Model Score is weighted by your selected investment goal. How it works →
Why Ranked Here
- The profitability sub-score of 20.0/20 anchors the overall score at 59.4, as TXN's filing-derived net margins and operating margins are among the strongest metrics in the model's semiconductor coverage universe.
- The financial health sub-score of 14.0/20 contributes positively, reflecting that TXN's leverage ratio and interest coverage — drawn directly from the 10-K balance sheet and income statement — remain within ranges the model treats as financially sound.
- The model's confidence rating of 10.0/10 means all 10 core metrics were successfully mapped from SEC EDGAR filings, so the 59.4 score reflects a fully-populated data set rather than estimated or partially-imputed values, making the ranking more reliable than lower-confidence peers.
Why Not Higher
- The growth sub-score of 12.5/20 and momentum sub-score of 10.4/20 together cap the total score significantly, because the model penalizes companies where year-over-year and sequential financial improvement is subdued, which is the case for TXN in this filing cycle.
- The zero theme score (0.0/20) removes an entire scoring dimension that could have added up to 20 points, and the dividend sub-score of 7.5/20 — reflecting FCF coverage strain — further limits the total, preventing TXN from reaching the upper scoring tiers despite its profitability strength.
Data Confidence
10 / 10
Very High — full data coverage
Research Summary
AI-generated analysis reflects data and conditions as of the report date shown above. Verify any specific figures through primary sources before acting on this analysis.
Texas Instruments Incorporated is a global semiconductor company headquartered in Dallas, Texas, specializing in analog chips and embedded processors used across industrial, automotive, personal electronics, and communications infrastructure markets. Unlike many chip designers that rely on third-party fabs, TXN operates its own manufacturing facilities, giving it significant control over production costs and capacity planning. The company's FY2025 10-K filing underpins all scoring here, and the resulting model score of 59.4/100 reflects a business with genuine strengths in profitability and financial health, but with measurable headwinds in growth and dividend sustainability relative to model thresholds. The score breakdown reveals a company that earns near-peak marks on profitability (20.0/20), reflecting strong net margins, operating margins, and return on assets derived directly from SEC filings. Financial health also scores well (14.0/20), suggesting manageable leverage and reasonable interest coverage. However, the growth sub-score (12.5/20) signals that year-over-year revenue, net income, and EPS growth have been under pressure — consistent with the semiconductor cycle downturn that Texas Instruments has publicly discussed in its filings. The momentum sub-score (10.4/20) indicates that quarterly sequential improvement in revenues, earnings, and margins has been modest, meaning the recovery trajectory is gradual rather than sharp. The dividend sub-score of 7.5/20 warrants attention: while TXN has a well-known dividend history, the model's FCF payout ratio and FCF coverage metrics suggest the dividend is consuming a meaningful share of free cash flow under current conditions. The core research tradeoff for TXN is between a structurally high-quality business — one with durable margins and a strong balance sheet — and a near-term environment where growth has stalled and the dividend coverage ratio is stretched. The model assigns a 'Research Further' label under the 'Safe Long-Term Investing' goal profile, where it scores highest at 64.0, but the High risk rating tempers that framing. Researchers should weigh the quality of the underlying business against the cyclical and financial pressures visible in the filing data.
Plain English
Texas Instruments makes the chips inside industrial machines, cars, and consumer electronics — not the flashy processors you hear about in AI headlines, but the essential analog and embedded chips that almost every electronic device needs. The model score of 59.4 out of 100 means TXN is a decent-quality company that doesn't quite clear the bar for a strong research recommendation right now, mainly because revenue growth has been weak and the dividend is consuming a lot of free cash flow. The High risk rating reflects real financial pressures visible in the filings, not just stock volatility. It's labeled 'Research Further,' meaning there's enough quality here to warrant a closer look, but not enough momentum or growth to treat it as a straightforward long-term research candidate without digging deeper.
Bull Case vs. Bear Case
Bull Case
- The profitability sub-score of 20.0/20 — the model's maximum — signals that Texas Instruments maintains exceptional net margins, operating margins, and return on assets as reported in its FY2025 10-K, reflecting the structural cost advantages of its owned-manufacturing model.
- The financial health sub-score of 14.0/20 indicates that TXN's balance sheet carries manageable leverage and sufficient interest coverage, suggesting the company has meaningful capacity to absorb cyclical downturns without acute solvency risk.
- The momentum sub-score of 10.4/20, while modest, indicates that sequential quarterly improvements in revenue, earnings, or margins are occurring, suggesting the semiconductor cycle trough may be forming and that the operating recovery could strengthen over subsequent reporting periods.
Bear Case
- The growth sub-score of 12.5/20 directly reflects weak year-over-year revenue, net income, and EPS growth as captured in the FY2025 10-K filing, confirming that TXN has not yet returned to a meaningful organic growth trajectory.
- The dividend sub-score of 7.5/20 indicates that the FCF payout ratio and FCF coverage metrics are under strain, meaning TXN's well-established dividend practice is consuming a disproportionately large share of its free cash flow at current earnings levels.
- The theme sub-score of 0.0/20 means the model finds no qualifying macro theme exposure — such as AI infrastructure build-out, energy transition, or defense electronics — that would support a narrative-driven re-rating of TXN's growth outlook based on SEC filing disclosures.
What Could Change the Picture
Bullish Triggers
- A material improvement in the growth sub-score — driven by filing-demonstrated acceleration in year-over-year revenue and EPS in subsequent 10-K or 10-Q disclosures — would signal that the semiconductor cycle recovery is translating into TXN's top-line and bottom-line results.
- An improvement in the dividend sub-score, specifically a reduction in the FCF payout ratio and strengthening of FCF coverage as reported in future filings, would indicate that TXN's capital return program is on a more sustainable footing and would meaningfully lift the overall model score.
Bearish Triggers
- A further deterioration in the momentum sub-score in subsequent filings — indicating that sequential quarterly revenue, earnings, or margin improvements have stalled or reversed — would suggest the recovery trajectory is weaker than the current data implies.
- An increase in leverage or a deterioration of interest coverage ratios as reported in future 10-K filings, potentially driven by continued heavy capital expenditure on manufacturing capacity, would reduce the financial health sub-score and raise the effective risk profile of the research candidate.
Red Flags
- The dividend sub-score of 7.5/20 combined with the growth sub-score of 12.5/20 raises a specific concern: if free cash flow does not recover in line with ongoing capital expenditure commitments disclosed in the 10-K, the sustainability of dividend growth could come under increased pressure.
- A theme score of 0.0/20 suggests that Texas Instruments' core analog and embedded processor business, as described in its SEC filings, does not map to high-priority macro growth themes the model tracks, which limits visibility into near-term demand acceleration from secular tailwinds.
Risk Profile
High RiskThe High risk rating for Texas Instruments reflects the combination of filing-documented earnings and free cash flow pressure during a semiconductor down-cycle, elevated capital expenditure commitments visible in the 10-K, and a dividend coverage ratio that leaves limited margin for further deterioration in operating performance. For a company positioned under a 'Safe Long-Term Investing' goal profile, these near-term financial stresses introduce meaningful uncertainty around the durability of returns even if the underlying business model is structurally sound.
Key Catalysts to Watch
The primary catalysts to monitor are evidence in future SEC filings of sustained revenue recovery and margin expansion in TXN's analog and embedded processor segments, which would improve both the growth and momentum sub-scores. Additionally, any filing-disclosed improvement in free cash flow generation relative to capital expenditure and dividend outflows would directly strengthen the dividend sub-score and reduce the financial risk flagged in the current model output.
This report is for educational and research purposes only. It does not constitute financial, investment, legal, or tax advice — always conduct your own due diligence before making investment decisions.