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Texas Instruments Incorporated (NASDAQ:TXN) saw a double-digit share price rise of over 10% in the past couple of months on the NASDAQGS. The recent rally in share prices has nudged the company in the right direction, though it still falls short of its yearly peak. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? Let’s take a look at Texas Instruments’s outlook and value based on the most recent financial data to see if the opportunity still exists.
What's The Opportunity In Texas Instruments?
According to our valuation model, Texas Instruments seems to be fairly priced at around 7.75% above our intrinsic value, which means if you buy Texas Instruments today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is $150.74, then there isn’t really any room for the share price grow beyond what it’s currently trading. Furthermore, Texas Instruments’s low beta implies that the stock is less volatile than the wider market.
View our latest analysis for Texas Instruments
What kind of growth will Texas Instruments generate?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. With profit expected to grow by 55% over the next couple of years, the future seems bright for Texas Instruments. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What This Means For You
Are you a shareholder? It seems like the market has already priced in TXN’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you’ve been keeping tabs on TXN, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.