Is It Time To Consider Buying Texas Instruments Incorporated (NASDAQ:TXN)?

Today we're going to take a look at the well-established Texas Instruments Incorporated (NASDAQ:TXN). The company's stock received a lot of attention from a substantial price movement on the NASDAQGS over the last few months, increasing to US$220 at one point, and dropping to the lows of US$188. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Texas Instruments' current trading price of US$188 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Texas Instruments’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

View our latest analysis for Texas Instruments

What's The Opportunity In Texas Instruments?

According to our valuation model, Texas Instruments seems to be fairly priced at around 4.6% below our intrinsic value, which means if you buy Texas Instruments today, you’d be paying a fair price for it. And if you believe that the stock is really worth $197.24, then there’s not much of an upside to gain from mispricing. Furthermore, Texas Instruments’s low beta implies that the stock is less volatile than the wider market.

What does the future of Texas Instruments look like?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. Texas Instruments' earnings over the next few years are expected to increase by 60%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? It seems like the market has already priced in TXN’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping an eye on TXN, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. For example - Texas Instruments has 1 warning sign we think you should be aware of.

If you are no longer interested in Texas Instruments, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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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.