Verdict
Overvalued
What is Texas Instruments Incorporated (TXN) worth?
Currently $291.30 — 64% premium to Dolphy’s fair value · ● live
Steady operator
medium confidence in the point estimate
● live · as of 2026-07-21 21:13 · Market cap $273.4B
As of 2026-07-15, Texas Instruments Incorporated (TXN) looks overvalued. Dolphy estimates a fair value of $178.00 versus a current price of $291.30 — a 64% premium to fair value.
Executive summary
Texas Instruments is a premium, cyclical analog/embedded franchise emerging from a demand trough and the tail end of a six-year elevated-capex cycle. Q1 FY26 confirmed the recovery: revenue $4.83B (+19% YoY, +9% sequential), operating margin back to 37.5%, EPS $1.68. FY2025 revenue was $17.68B with $5.0B net income ($5.45 EPS), still well below the 2022 peak ($20.0B rev, $9.41 EPS). The bull thesis is straightforward and real — as capex falls from $4.55B toward $2-3B and new 300mm fabs (Sherman, Lehi, Richardson) fill, free cash flow should inflect sharply from the ~$4.4B TTM level, and TXN's whole strategy is to compound FCF/share.
The catch is valuation. At $300.43 (EV ~$287B) the stock trades at ~31x forward and ~51x trailing earnings. Our normalised DCF and peer comps cluster at $112-$176; even a generous inflection DCF is $169. A reverse-DCF shows the price requires ~32% annual FCF growth for five years — roughly a triple. We set fair value at ~$178, implying the stock is meaningfully overvalued: the market has already priced the recovery to peak earnings and a sustained premium multiple. Great company, demanding price.
How we value it
DCF + peer comps (PE & EV/EBITDA) on normalised mid-cycle earnings power
Every figure is computed from SEC filings by the analyst’s calculator tools and fact-checked by a second, independent model.
Investment thesis
About Texas Instruments Incorporated
Texas Instruments Incorporated designs, manufactures, and sells semiconductors to electronics designers and manufacturers in the United States, China, the rest of Asia, Europe, the Middle East, Africa, Japan, and internationally. It operates through Analog and Embedded Processing segments. The Analog segment offers power products to manage power requirements across various voltage levels, including battery-management solutions, DC/DC switching regulators, AC/DC and isolated controllers and converters, power switches, linear regulators, voltage references, multiphase controllers and power stages, and lighting products. This segment also provides signal chain products that sense, condition, and measure real-world signals and convert them into data to be transferred or converted for further processing and control, such as amplifiers, data converters, interface products, motor drives, clocks, and logic and sensing products. The Embedded Processing segment offers microcontrollers, processors, wireless connectivity, and radar products; and applications processors for specific computing activity. It also provides DLP products primarily for use in projecting high-definition images; calculators; and application-specific integrated circuits. Its products are used in various markets, such as industrial, automotive, personal electronics, communications equipment, enterprise systems, calculators, and others. The company markets and sells its semiconductor products through direct sales and distributors, as well as through its website. Texas Instruments Incorporated was founded in 1930 and is headquartered in Dallas, Texas.
Frequently asked questions
Is TXN a buy?
As of 2026-07-15, Texas Instruments Incorporated (TXN) looks overvalued. Dolphy estimates a fair value of $178.00 versus a current price of $291.30 — a 64% premium to fair value.
What is TXN's fair value?
Dolphy's estimated fair value for Texas Instruments Incorporated (TXN) is $178.00, versus a current market price of $291.30.
Is TXN overvalued or undervalued?
Texas Instruments Incorporated (TXN) currently looks overvalued — trading at a 64% premium to Dolphy's estimated fair value of $178.00.
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AI-generated research by Dolphy for educational and informational purposes only — not investment advice. Figures are computed from public sources and may contain errors.