Editor's Note: 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.
NEW YORK (
Rockwell Automation Rises on $2.2 Billion Deal for Plex Systems
Rockwell Automation agreed to buy Plex Systems, a manufacturing-software platform, for $2.2 billion from the private-equity firm Francisco Partners.
) 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, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.
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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 59.30%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 13.40% trails the industry average.
- Net operating cash flow has slightly increased to $675.00 million or 6.97% when compared to the same quarter last year. Despite an increase in cash flow, TEXAS INSTRUMENTS INC's cash flow growth rate is still lower than the industry average growth rate of 24.40%.
- TXN, with its decline in revenue, underperformed when compared the industry average of 13.9%. Since the same quarter one year prior, revenues slightly dropped by 3.5%. 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 0.42, 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 1.04 is sturdy.
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 21.4, equal to the average electronics industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Texas Instruments has a market cap of $33.36 billion and is part of the
industry. Shares are up 0.4% year to date as of the close of trading on Tuesday.
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--Written by a member of TheStreet Ratings Staff.