• If you are wondering whether Texas Instruments' current share price still offers value, it helps to step back and look at what the recent returns and valuation checks are really telling you.
• The stock closed at US$297.10, with the share price down 2.7% over the last 7 days, slightly up 0.7% over the last month, and showing returns of 67.4% year to date and 53.0% over the past year.
• Recent coverage has focused on the stock's multi year share price performance, with returns of 82.1% over 3 years and 82.5% over 5 years. This has kept Texas Instruments firmly on many investors' watchlists. At the same time, ongoing discussion around interest rates and sector valuations has kept attention on whether current prices still line up with underlying fundamentals.
• Right now, Texas Instruments has a valuation score of 2/6. The rest of this article will break down how different methods such as discounted cash flow, multiples, and other checks compare, before finishing with a way to look at valuation that can give you an even clearer picture.

Texas Instruments scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Texas Instruments Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model estimates what a stock could be worth by projecting the company’s future cash flows and then discounting them back to today’s dollars. It is essentially asking what all those future cash flows are worth right now.

For Texas Instruments, the current last twelve month Free Cash Flow is about $2.7b. The 2 Stage Free Cash Flow to Equity model then uses analyst forecasts and longer term projections to estimate future Free Cash Flow, reaching a projected $16.6b in 2030. Beyond the analyst window, Simply Wall St extrapolates those figures to build a 10 year cash flow path using the data provided.

After discounting these projected cash flows back to today, the model arrives at an estimated intrinsic value of $213.62 per share. Against the recent share price of $297.10, this DCF output suggests the stock is trading about 39.1% above that estimate, which points to Texas Instruments being overvalued on this particular cash flow model.

Result: OVERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Texas Instruments may be overvalued by 39.1%. Discover 46 high quality undervalued stocks or create your own screener to find better value opportunities.

Approach 2: Texas Instruments Price vs Earnings

For profitable companies, the P/E ratio is a useful shorthand because it links what you are paying directly to the earnings the business is already generating. It gives you a quick way to see how many dollars investors are willing to pay today for each dollar of earnings.

What counts as a “normal” P/E depends a lot on expectations and risk. Higher expected earnings growth or lower perceived risk can justify a higher P/E, while slower growth or higher risk tends to support a lower P/E.

Texas Instruments currently trades on a P/E of 50.67x. This is below the broader Semiconductor industry average P/E of 67.75x and also below the peer average of 52.03x that Simply Wall St uses for comparison. Simply Wall St also calculates a proprietary “Fair Ratio” for the stock of 45.44x, which reflects factors such as earnings growth, profit margins, industry, market cap and company specific risks.

This Fair Ratio can be more useful than a simple peer or industry comparison because it is tailored to the company’s own profile rather than applying a broad sector average. Comparing the current P/E of 50.67x with the Fair Ratio of 45.44x suggests the stock is trading above this tailored benchmark.

Result: OVERVALUED

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Upgrade Your Decision Making: Choose your Texas Instruments Narrative

Earlier it was mentioned that there is an even better way to understand valuation. Narratives on Simply Wall St’s Community page give you a simple way to link your view of Texas Instruments' story to a financial forecast and then to a Fair Value, so you can see at a glance whether your own Fair Value suggests the stock is above or below your preferred buying or selling range.

Each Narrative lets you set assumptions for future revenue, earnings, margins and P/E, then turns those into a Fair Value that is automatically compared with the live share price to help you decide if the current price fits your view. The Narrative is refreshed as new data such as earnings, news or guidance is added.

For example, one Texas Instruments Narrative on the bullish end currently applies a Fair Value of US$435.69 per share, while a more cautious Narrative applies a Fair Value of US$206.93. This shows how different investors can look at the same company and, by telling different stories in the numbers, reach very different conclusions about what the stock is worth today.

For Texas Instruments, here are previews of two leading Texas Instruments Narratives to make comparison straightforward:

Fair Value: US$435.69

Implied undervaluation vs last close (US$297.10): about 31.8% below this Fair Value

Revenue growth assumption: 11%

• Views the current capacity expansion as a temporary drag on free cash flow that is intended to support a stronger competitive position over time through U.S.-based 300mm analog manufacturing.
• Highlights a solid balance sheet, a long record of dividend growth, and a portfolio of long-lived analog and embedded products that support revenue durability across industrial, automotive, aerospace or defense, and energy infrastructure end markets.
• Argues that the current valuation reflects shorter term softness rather than the longer term margin structure and demand from trends such as automation, electrification, and AI-driven systems.

Fair Value: US$280.63

Implied overvaluation vs last close (US$297.10): about 5.9% above this Fair Value

Revenue growth assumption: 12.76%

• Frames Texas Instruments around industrial automation and automotive demand, paired with concerns about competition, technology shifts, and geopolitical uncertainty that could pressure margins and utilization of new fabs.
• Builds a detailed set of assumptions for revenue, profit margins, earnings, P/E, and discount rate, which together point to a Fair Value slightly below the current share price and a view that the stock is close to fairly priced.
• Flags risks such as potential commoditization in analog and embedded chips, underused manufacturing capacity, policy or tariff changes, and sensitivity to industrial and automotive cycles.

These two Narratives provide clear, quantified views on Texas Instruments so you can see how different assumptions about growth, margins, and risk translate into very different Fair Values and assess which perspective is closer to your own expectations.

Do you think there's more to the story for Texas Instruments? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.