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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Texas Instruments Incorporated (XNAS:TXN) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
TXN
Name:
TEXAS INSTRUMENTS INCORPORATED (XNAS:TXN)
Sector:
1.70B
Industry:
Semiconductors
CEO:
Mr. Richard Templeton
Total Employees:
31,000
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -102.49% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF TEXAS INSTRUMENTS INCORPORATED(TXN) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND SEMICONDUCTORS INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
163
One Month Price Target:
$163.93
Six Month Price Target :
$168.6
Likely Price in One Year's Time:
Ticker:
$174.19
Likely Trading Range Today Under (Normal Volatility)
$162.5
Price Upper limit ($) :
$163.71
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$155.8
This week:
$146.89
This month :
$130.79
Other Primary facts
Market Cap:
149.03B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
913.71M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
13.53%
-11.83%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$196.41
$180.99
$129.59
$145.01
Medium risk (<10%) entry points
Buy Call
Sell Call
$175.97
Buy Put:
Sell Put:
$172.67
$149.99
$153.33
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
TXN
Sharpe Ratio:
2.52%
Comparison:
TXN, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is -18.53% lower than the industry
& ratio is 10.68% higher than the market/S&P 500 average
Average Returns/Yield of
TXN
Daily returns:
0.06%
Weekly returns:
0.32%
Monthly returns:
1.28%
Yearly returns:
31.95%
Comparison of returns:
Average annual returns/yield (last 3 years) is -51.98% below industry average
Classification:
TXN, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.79
Statistical test of Returns:
TXN has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.18%
Weekly Volatility:
4.88%
Monthly Volatility:
9.76%
Yearly Volatility:
33.81%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.02%
Volatility in last five trading days has been -53.34% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.42%
Weekly VaR:
-9.88%
Monthly VaR:
-19.76%
How Much Can the price of
TXN
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-17%
Worst case (decline):
-68.46%
This translates to price declining to:
$135.71
This translates to price declining to:
$51.42
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
TXN is a 39.48% riskier investment compared to the market/S&P 500 & is 19.49% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -38.50% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
TXN
Beta in relation to market/S&P 500--1.02
Expected beta in 1 year's time:
0.679
Expected beta in 3 year's time:
0.961
Unlevered (debt free) Beta:
0.706
Beta in relation to Nasdaq (XNAS):
0.985
Beta in relation to all global stocks::
0.771
Beta Comparison & Analysis
Beta of competitors/peers::
1.249
Beta is -18.23% lower than peers
Average Industry Beta:
1.41
Beta is -27.56% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
32.12%
Sustainable growth rate is 16.17% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.052
Alpha is -72.88% below industry average alpha yield
Alpha is 330% higher than market/& is unsustainably high
Analysis of Cost of Capital of
TXN
Equity cost of capital:
0.101
Equity cost of capital is -20.78% below industry mean WACC
Unlevered (without debt) cost of capital:
7.02%
Before-tax cost of debt:
2.45%
After-tax cost of debt:
1.94%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
1.94%
WACC is -26.67% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$20.75
Revenue growth rate per share of (3Y):
10.63
Annual revenue growth rate is -23.94% below industry average
EPS:
$8.75
Expected Annual growth rate of EPS (3Y):
15.51%
Expected future EPS growth rate is -70.26% lower than the Semiconductors industry
Free cash flow (FCF) per share:
$7.23
Balance sheet equity growth per share: 60.19%
Equity growth rate per share is 325.06% higher than the industry
Debt per share
$7.93
EBITDA per share
$11.63
Valuation Analysis Today of
TXN
P/E Ratio:
17.82
P/E Ratio of Competitors/Peers:
25.91
P/E ratio is -31.21% lower than main peers & is -57.03% lower than the industry
Stock price/value with industry average P/E ratio: $362.92
TXN is -55.09% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $77.15
Present value of the expected future dividends only: $60.84
P/S (Price to Sales ratio):
7.86
Price to sales ratio is -3.36% below the industry mean
P/B (Price to book value ratio):
10.63
Price to free cash flow: 22.54
Price to free cash flow ratio is -59.42% lower than the industry
Net income growth rate (3Y):
46.64%
Net income growth rate is -181.42% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 12.94%
Dividend yeild: 2.74%
Previous Dividend: $1.15
Previous adjusted dividend: $1.15
Previous Dividend: $4.47
Expected next dividend best case: $1.24
Expected next dividend worst case: $1.06
Average dividend payment (long-term): $1.01
Average dividend increase/decrease (growth rate) % per period: 2.61%
Expected next dividend payment date: 15/08/2022
Expected next dividend record date: 08/08/2022
Expected next dividend declaration date: 27/07/2022
Previous dividend payment date: 17/05/2022
Previous dividend record date: 05/09/2022
Previous dividend declaration date: 28/04/2022
Dividend History:
2022-05-06--$1.15
2021-10-29--$1.15
2021-04-30--$1.02
2022-01-28--$1.15
2021-07-23--$1.02
2021-01-29--$1.02
Dividend growth rate is -1.70% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
51.67%
Net debt to equity ratio:
30.23%
Debt to assets ratio:
28.65%
Net debt to assets ratio:
16.76%
Debt-to-asset ratio is -26.50% below industry average
Ability to repay debt:
Interest coverage ratio:
55.91
Interest coverage ratio is 70.54% more than industry average
Looking forward:
Debt growth rate:
15.28%
Annual debt growth is -83% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.812
Statistical significance of correlation:
TXN has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.627
Stock price is 29.45% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.627
Correlation of price movement with Nasdaq (^IXIC):
-0.006
Covariance of price movement with the market:
-0.007
Kurtosis
4.575
Returns have moderate fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0.125
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
TXN
Gross Profit Margin Ratio:
275%
Operating Profit Margin Ratio:
50.55%
Operating profit margin is 114.85% higher than the industry
Net Profit Margin Ratio:
275%
Effective Tax Rate:
13.56%
Effective tax rate is -10.15% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
58.62%
Return on equity (ROE) is 105.00% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
32.51%
Return on assets (ROA) is 146.97% higher than the industry
Financial Leverage:
1.4x
Current Ratio:
5.54
Current ratio is 36.46% above industry average
Cash Conversion Cycle (days):
22.7
Cash conversion cycle is -58.83% below industry average
The remaining useful life of property plant & equipment is: 0.0 years
Stock based compensation to net income ratio:
0.90%
In-depth Efficiency Analysis
Revenue generated per employee:
611.6K
Each employee generates -1% less revenue than industry average revenue per employee
EBITDA generated per employee:
342.7K
Each employee generates 47% more EBITDA than industry average revenue per employee
Profit generated per employee:
265.1K
Each employee generates 65% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
54.9K
Each employee generates 98% more free cash flow than industry average revenue per employee
Assets/Capital per employee
363.4K
Each employee generates 98% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 1.57%
Growth rate in R&D investment/expenditure is -88.92% lower than the industry
Competitors/Peer firms of
TXN
INTUIT INC. (XNAS:INTU)
ADVANCED MICRO DEVICES, INC. (XNAS:AMD)
APPLIED MATERIALS, INC. (XNAS:AMAT)
INTEL CORPORATION (XNAS:INTC)
MICRON TECHNOLOGY, INC. (XNAS:MU)
LAM RESEARCH CORPORATION (XNAS:LRCX)
ANALOG DEVICES, INC. (XNAS:ADI)
ADOBE INC. (XNAS:ADBE)
ATLASSIAN CORPORATION PLC (XNAS:TEAM)
Current Analyst Ratings
Strong buy�25%
Buy�33%
Hold�71%
Sell�4%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
18.96B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
5.94B
13.02B
1.56B
-
1.66B
-
-
3.22B
-
190.00M
927.00M
10.62B
9.58B
8.22B
9.51B
1.29B
8.22B
Statement of Cash Flow
Date:
Period:
214.00M
Differed Income Tax :
- 1000.00K
Stock Based Compensation :
74.00M
Change in Working Capital :
- 316000.00K
Accounts Receivables:
- 94000.00K
Other Working Capital:
- 388000.00K
Other Non-Cash Items:
- 28000.00K
Net Cash Provided by Operating Activities:
2.14B
Investments in PP&E:
-
Net Acquisitions:
-
Purchases of Investments:
- 3988000.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
3.51B
6.32B
9.83B
1.80B
2.06B
330.00M
14.01B
5.44B
4.36B
91.00M
-
273.00M
1.10B
11.27B
-
25.28B
641.00M
500.00M
405.00M
-
1.39B
2.53B
7.24B
1.40B
8.73B
-
11.26B
1.74B
47.05B
- 153000.0K
- 34624000.00K
March 31, 2022 at 6:00:00 AM
9.16B
14.02B
25.28B
-
7.74B
4.2B
2.77B
- 454000.00K
- 1668000.00K
-
57.00M
- 589000.00K
- 1063000.00K
- 7000.00K
- 1602000.00K
-
- 1126000.00K
3.51B
4.63B
2.14B
- 443000.00K
1.70B
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
TXN
2023
2024
2025
2026
2027
$219.38
$234.44
$250.53
$267.74
$286.12