Is Now The Time To Look At 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 saw a decent share price growth of 11% on the NASDAQGS over the last few months. The company is inching closer to its yearly highs following the recent share price climb. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, could the stock still be trading at a relatively cheap price? Let’s take a look at Texas Instruments’s outlook and value based on the most recent financial data to see if the opportunity still exists.

Check out our latest analysis for Texas Instruments

Is Texas Instruments Still Cheap?

According to our valuation model, Texas Instruments seems to be fairly priced at around 1.0% below our intrinsic value, which means if you buy Texas Instruments today, you’d be paying a reasonable price for it. And if you believe the company’s true value is $203.39, then there isn’t much room for the share price grow beyond what it’s currently trading. 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?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With profit expected to grow by 53% over the next couple of years, the future seems bright for Texas Instruments. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What This Means For You

Are you a shareholder? TXN’s optimistic future growth appears to have been factored into the current share price, 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 optimal time to buy, given it is trading around its fair value. However, the positive outlook 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.

So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. For example - Texas Instruments has 2 warning signs 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.