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 (
) 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 increase in net income, expanding profit margins, good cash flow from operations, increase in stock price during the past year and largely solid financial position with reasonable debt levels by most measures. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.
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Highlights from the ratings report include:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income increased by 30.7% when compared to the same quarter one year prior, rising from $600.00 million to $784.00 million.
- The gross profit margin for TEXAS INSTRUMENTS INC is rather high; currently it is at 57.50%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 23.54% is above that of the industry average.
- Net operating cash flow has slightly increased to $1,202.00 million or 5.62% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -26.40%.
- Despite currently having a low debt-to-equity ratio of 0.50, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that TXN's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.54 is high and demonstrates strong liquidity.
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
Texas Instruments Incorporated engages in the design and sale of semiconductors to electronics designers and manufacturers worldwide. Texas Instruments has a market cap of $34.67 billion and is part of the technology sector and electronics industry. The company has a P/E ratio of 20.2, above the S&P 500 P/E ratio of 17.7. Shares are up 5.8% year to date as of the close of trading on Wednesday.
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--Written by a member of TheStreet Ratings Staff.
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