TXN leads in analog and embedded processing chips, essential for diverse industrial and automotive applications. This niche requires deep engineering expertise and long qualification cycles.

↑Manufacturing Scale & Efficiency

Significant investment in its own wafer fabrication facilities provides cost advantages and supply chain control. This vertical integration is difficult for competitors to replicate.

↑Strong Cash Returns

Consistent and substantial capital returns to shareholders through dividends and buybacks build investor loyalty. This financial discipline supports long-term valuation.

INVESTMENT RISKS

↓Cyclical Semiconductor Market

The semiconductor industry is inherently cyclical, subject to fluctuations in global demand and inventory levels. This can impact TXN's revenue and profitability.

↓AI Growth Expectations

While benefiting from AI infrastructure, TXN faces scrutiny if AI growth projections falter. Competitors with more direct AI chip exposure could gain favor.

↓Technological Obsolescence

Rapid advancements in chip technology require continuous R&D investment. Failure to innovate could lead to market share erosion.

Base case

TXN base case PE valuation

A base case PE valuation for TXN estimates a fair value of about $443.02 per share, against a current price of $301.12. The model assumes 17.3% annual earnings growth, a 50x target PE multiple, and a 10% discount rate.

Intrinsic Value

$443.02

Margin of safety

+32.0%

Expected annual return

+8.0%

Base case assumptions: 17.3% annual earnings growth, 50x target PE, 10% discount rate, 5 year projection. Data as of 2026-06-12.

This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.

Customize the TXN PE valuation

Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for Texas Instruments Incorporated respond.

Open PE Calculator for TXN

Or try DCF Valuation for TXN →

Company Overview

Texas Instruments Incorporated (TI) specializes in the global design, production, and sale of semiconductors to electronics engineers and manufacturers. Its operations are structured into two core segments: Analog and Embedded Processing. The Analog division provides a comprehensive suite of power management products, such as battery-management solutions, various DC/DC and AC/DC switching regulators and controllers, power switches, linear regulators, voltage supervisors, references, and lighting components, all critical for managing diverse power needs. This segment also delivers signal chain products designed to sense, condition, and measure electrical signals, facilitating information transfer or conversion for further processing and control, encompassing items like amplifiers, data converters, interface devices, motor drives, clocks, and sensing technologies. The Embedded Processing segment develops microcontrollers, integral to a wide array of electronic equipment; digital signal processors (DSPs) for complex mathematical computations; and applications processors tailored for specific computing tasks. Products from this segment are utilized across numerous markets, including industrial applications, the automotive sector, personal electronics, communication systems, enterprise solutions, and calculators. Beyond these, TI also produces DLP® products, primarily used in projectors to generate high-definition images; a range of calculators; and custom application-specific integrated circuits (ASICs). The company distributes its semiconductor offerings through a direct sales force, its network of authorized distributors, and its official website. Established in 1930, Texas Instruments is headquartered in Dallas, Texas.

Financial Metrics — TXN PE Stock Valuation Data

PE Ratio (TTM)

51.0x

PEG Ratio

4.85

Earnings Yield

1.96%

ROE (TTM)

32.5%

Revenue/Share (TTM)

$20.28

Dividend Yield

1.87%

Debt/Equity

0.84x

Frequently Asked Questions

What is the PE ratio of TXN?

The trailing twelve-month PE ratio of TXN reflects how much investors pay per dollar of Texas Instruments Incorporated's earnings. This metric is most useful when compared to Semiconductors peers and the company's own historical range.

Is TXN overvalued based on PE ratio?

TXN's PE of 51.0x combined with a PEG ratio of 4.85 provides a growth-adjusted perspective. A PEG above 2.0 suggests TXN may be richly valued even accounting for growth. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Semiconductors, a DCF analysis may be more appropriate.

How do I value TXN stock using PE ratio?

To value Texas Instruments Incorporated using PE: (1) Compare the current PE (51.0x) against the Semiconductors median to assess relative pricing, (2) check the PEG ratio (4.85) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.

What is the PEG ratio of TXN?

TXN's PEG ratio is 4.85, calculated by dividing the PE ratio (51.0x) by the expected earnings growth rate. A PEG above 2.0 often signals the stock is priced aggressively relative to its growth trajectory. Note that PEG accuracy depends on the reliability of growth estimates.

Should I use PE ratio or DCF for TXN stock valuation?

PE ratio gives a quick relative read — how TXN is priced versus Semiconductors peers. DCF provides an absolute value based on projected free cash flows. For TXN, with a strong ROE of 32.5%, both methods are worth using — PE for a market-relative check, DCF to stress-test whether fundamentals justify the price. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.

Learn More

See TXN DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
PE Methodology — Step-by-step guide to PE ratio stock valuation
DCF Methodology — Guide to discounted cash flow analysis
PE Ratio — Understanding the price-to-earnings ratio
Intrinsic Value — How to evaluate stock fair value

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P/E and DCF value TXN with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic value.

Price as of 2026-06-12. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.

This is an estimate, not investment advice.