Interested In Texas Instruments Incorporated (NASDAQ:TXN)? Here’s What Its Recent Performance Looks Like
In this commentary, I will examine Texas Instruments Incorporated’s (NASDAQ:TXN) latest earnings update (30 September 2018) and compare these figures against its performance over the past couple of years, as well as how the rest of the semiconductor industry performed. As an investor, I find it beneficial to assess TXN’s trend over the short-to-medium term in order to gauge whether or not the company is able to meet its goals, and ultimately sustainably grow over time.
See our latest analysis for Texas Instruments
How TXN fared against its long-term earnings performance and its industry
TXN’s trailing twelve-month earnings (from 30 September 2018) of US$4.6b has increased by 7.1% compared to the previous year.
However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 15%, indicating the rate at which TXN is growing has slowed down. To understand what’s happening, let’s examine what’s occurring with margins and if the entire industry is feeling the heat.
In terms of returns from investment, Texas Instruments has invested its equity funds well leading to a 45% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 26% exceeds the US Semiconductor industry of 8.5%, indicating Texas Instruments has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Texas Instruments’s debt level, has increased over the past 3 years from 30% to 42%.
What does this mean?
Though Texas Instruments’s past data is helpful, it is only one aspect of my investment thesis. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? I suggest you continue to research Texas Instruments to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for TXN’s future growth? Take a look at our free research report of analyst consensus for TXN’s outlook.
Financial Health: Are TXN’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 30 September 2018. This may not be consistent with full year annual report figures.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
