Texas Instruments (TXN) Registers a Bigger Fall Than the Market: Important Facts to Note

Texas Instruments (TXN) closed at $258.80 in the latest trading session, marking a -1.07% move from the prior day. This change lagged the S&P 500's 0.59% loss on the day. Elsewhere, the Dow lost 0.6%, while the tech-heavy Nasdaq lost 0.65%.

The chipmaker's stock has dropped by 5.42% in the past month, falling short of the Computer and Technology sector's loss of 0.02% and the S&P 500's loss of 1.37%.

Investors will be eagerly watching for the performance of Texas Instruments in its upcoming earnings disclosure. The company is predicted to post an EPS of $2.39, indicating a 61.49% growth compared to the equivalent quarter last year. In the meantime, our current consensus estimate forecasts the revenue to be $5.91 billion, indicating a 24.69% growth compared to the corresponding quarter of the prior year.

TXN's full-year Zacks Consensus Estimates are calling for earnings of $8.45 per share and revenue of $21.7 billion. These results would represent year-over-year changes of +55.05% and +22.73%, respectively.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Texas Instruments. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. At present, Texas Instruments boasts a Zacks Rank of #2 (Buy).

In the context of valuation, Texas Instruments is at present trading with a Forward P/E ratio of 30.95. This signifies a discount in comparison to the average Forward P/E of 37.22 for its industry.

One should further note that TXN currently holds a PEG ratio of 1.46. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Semiconductor - General was holding an average PEG ratio of 1.73 at yesterday's closing price.

The Semiconductor - General industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 22, positioning it in the top 9% of all 250+ industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

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