NEW YORK (
) has been reiterated by TheStreet Ratings as a buy with a ratings score of B. The company's strengths can be seen in multiple areas, such as its expanding profit margins, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
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Highlights from the ratings report include:
- The gross profit margin for TEXAS INSTRUMENTS INC is rather high; currently it is at 60.30%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, TXN's net profit margin of 8.50% significantly trails the industry average.
- TXN, with its decline in revenue, underperformed when compared the industry average of 20.0%. Since the same quarter one year prior, revenues slightly dropped by 8.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- Despite currently having a low debt-to-equity ratio of 0.48, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.46 is sturdy.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market on the basis of return on equity, TEXAS INSTRUMENTS INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
Texas Instruments Incorporated engages in the design and sale of semiconductors to electronics designers and manufacturers worldwide. The company has a P/E ratio of 17.4, equal to the average electronics industry P/E ratioand below the S&P 500 P/E ratio of 17.7. Texas Instruments has a market cap of $30.87 billion and is part of the
industry. Shares are down 7.1% year to date as of the close of trading on Tuesday.
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--Written by a member of TheStreet Ratings Staff.
TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.