Texas Instruments has 1.7x more inventory thanks to strong sales growth


Texas Instruments Incorporated (NASDAQ: TXN) The stock price rose more than 1.7x from $104 in 2017 to approximately $179 today, primarily due to favorable changes in sales and P/S multiple. During this period, the company saw a strong 31% increase in revenue and combined with a decline in the number of outstanding shares, revenue per share increased by more than 40%. In addition, the S&P 500 returned around 55% over the same period, meaning TXN stocks have outperformed the broader markets since the end of 2017.

In our interactive dashboard, Why Texas Instruments Stock Moved: TXN shares are up 71% since 2017we break down the factors behind this movement.

Texas Instruments

Total revenue grew 31% from $15 billion in FY 2017 to $19.6 billion on an LTM basis

  • TI’s total revenue initially declined from $15 billion in FY ’17 to just $14.4 billion in FY ’19, as the glut of semiconductors stunted sales growth.
  • However, revenues have since recovered and climbed to $18.3 billion in FY ’21, currently even higher at $19.6 billion on an LTM basis.
  • TI’s analog semiconductor segment grossed $14.05 billion in FY ’21, accounting for more than 75% of the company’s total sales.
  • For more information on TI’s earnings and peer comparison, see: Texas Instruments Revenue Comparison

Revenue per share increased 42% from $14.95 in FY 2017 to $21.21 currently

  • Texas Instruments’ revenue increased from $15 billion in 2017 to $19.6 billion today, while the number of outstanding shares fell from about 1 billion in 2017 to just over 900 million today.
  • As a result, the RPS has risen from $14.95 in FY ’17 to $21.21 currently.

Price-to-Sales (P/S) multiple for Texas Instruments rose sharply from 6.2x at the end of 2017 to 10x

by the end of 2020, but is currently down to 8.4x, still about 35% higher than the end of 2017

  • TI’s P/S multiple rose sharply to 10x at the end of 2020, reflecting rising investor expectations of a rebound in revenue growth amid rising demand for the company’s products.
  • However, due to current geopolitical tensions and increased economic uncertainty weighing on broader markets, the P/S multiple has receded and currently stands at around 8.4x.
  • For more information on the company’s stock returns and comparison with peers, see: Texas Instruments Stock Return Comparison.

What if you’re looking for a more balanced portfolio instead? U.S high-quality wallet and multi-strategy portfolio have consistently beaten the market since late 2016.

Invest with Trefis Wallets that beat the market

See everything Trefis Price estimates