Related questions this article answers
- Is TE Connectivity stock overvalued right now?
- Is TEL undervalued?
- Should I buy TE Connectivity stock?
- Is now a good time to buy TEL?
- What is TE Connectivity's fair value?
- Is TEL a good long term investment?
The short answer
Short answer: TE Connectivity looks overvalued at current levels. Compared with the recent share price of $210.06, the current DCF output near $181.32 suggests TE Connectivity is about 15.9% overvalued on these cash flow assumptions. TE Connectivity is being valued in the context of a business with gross margin near 35.4%, which helps show what kind of operating model investors are paying for. The fair answer depends on whether the business can keep converting its current position into enough earnings, growth, and cash flow to justify the market price.
Why valuing this kind of technology company is more complex than it looks
TE Connectivity operates in Hardware, Equipment & Parts. Companies in this part of the market are usually valued on a mix of current earnings, expected growth, margin durability, and cash generation.
The reason this matters is simple. Two companies can show similar headline multiples and still deserve very different valuations because their margins, cash conversion, and growth durability are not the same.
The 5 key metrics applied to TE Connectivity
A single ratio rarely tells the whole story. This framework starts with trailing P/E, forward P/E, PEG, EV/EBITDA, and price to sales, then keeps only the metrics that are present and usable for this company.
Trailing P/E
Trailing P/E compares the current share price with the last twelve months of earnings. For TEL, the current reading is 33.9x. Shows what the market is paying for TEL's recent earnings.
Forward P/E
Forward P/E uses expected earnings instead of trailing earnings. For TEL, the current reading is 58.0x. Shows how the market is valuing TEL's expected earnings.
EV/EBITDA
EV/EBITDA compares enterprise value with operating profit before depreciation and amortization. For TEL, the current reading is 15.6x. Adds a capital structure aware check on operating valuation.
Price to sales
Price to sales compares market value with revenue. For TEL, the current reading is 3.3x. Useful when revenue mix, margins, or future scaling matter as much as near term earnings.
Free cash flow yield
Free cash flow yield compares free cash flow with market value. For TEL, the current reading is 5.5%. Shows how much cash TEL is generating relative to its market value.
| Metric | Current value | What it suggests |
|---|---|---|
| Trailing P/E | 33.9x | Shows what the market is paying for TEL's recent earnings. |
| Forward P/E | 58.0x | Shows how the market is valuing TEL's expected earnings. |
| EV/EBITDA | 15.6x | Adds a capital structure aware check on operating valuation. |
| Price to sales | 3.3x | Useful when revenue mix, margins, or future scaling matter as much as near term earnings. |
| Free cash flow yield | 5.5% | Shows how much cash TEL is generating relative to its market value. |
| Gross margin | 35.4% | Shows how much of TEL's revenue remains after direct costs. |
| Revenue growth | 7.9% | Shows whether TEL's top line is still expanding. |
The table is a snapshot of the current setup. It is meant to frame the valuation question, not replace the company specific analysis below.
TE Connectivity's valuation breakdown
As of Q2 2026, TE Connectivity traded near $210.06 with a market value near $61.32B.
| Metric | Current value | What it suggests |
|---|---|---|
| Trailing P/E | 33.9x | Shows what the market is paying for TEL's recent earnings. |
| Forward P/E | 58.0x | Shows how the market is valuing TEL's expected earnings. |
| EV/EBITDA | 15.6x | Adds a capital structure aware check on operating valuation. |
| Price to sales | 3.3x | Useful when revenue mix, margins, or future scaling matter as much as near term earnings. |
| Free cash flow yield | 5.5% | Shows how much cash TEL is generating relative to its market value. |
| Gross margin | 35.4% | Shows how much of TEL's revenue remains after direct costs. |
| Revenue growth | 7.9% | Shows whether TEL's top line is still expanding. |
Metrics move with the market and with each earnings update. If a field is missing or stale, it is intentionally left out here rather than guessed.
What the numbers tell us
The first thing to notice with TEL is the gap between trailing and forward earnings valuation. Trailing P/E is near 33.9x while forward P/E is near 58.0x, which tells you the market is already underwriting a specific earnings path.
- TEL's forward P/E is not offering much relief versus the trailing multiple, so the market may still be paying up before the earnings improvement is fully visible.
- TEL's price to sales multiple near 3.3x needs to be read beside revenue growth near 7.9%, because rich revenue multiples only hold up when growth quality stays intact.
- TEL's gross margin near 35.4% helps explain whether the market is dealing with a commodity style business or a business with stronger pricing power and business mix.
TE Connectivity's competitive position
TE Connectivity Ltd., together with its subsidiaries, manufactures and sells connectivity and sensor solutions in Europe, the Middle East, Africa, the Asia Pacific, and the Americas.
What would make TE Connectivity look cheaper or more expensive?
What would make it look cheaper
- TEL would look cheaper if the business kept growing while valuation multiples moved lower.
- TEL would also look more attractive if cash generation improved without the market price rising at the same pace.
What would make it look expensive
- TEL would look expensive if earnings or revenue expectations softened while the current multiple stayed elevated.
- TEL would also look expensive if margins weakened but the stock kept the same quality premium.
Technology valuation context
TE Connectivity operates in Hardware, Equipment & Parts. Companies in this part of the market are usually valued on a mix of current earnings, expected growth, margin durability, and cash generation.
The verdict
TE Connectivity looks close to a market level that already reflects much of the current business strength. Future upside is more likely to come from better fundamentals than from simple multiple expansion. With forward P/E near 58.0x, the market is already making a judgment about the next stage of earnings power.
This is analysis of publicly available market data. It is not financial advice, and it should be read in the context of personal goals, risk tolerance, and time horizon.
Want to run the numbers yourself?
Use TopTier Strategy research tools to review TEL's live valuation profile, stock page, and related company analysis.
Frequently asked questions
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Data source: TopTier Strategy research platform - toptierstrategy.com/research. Data as of 2026-05-08T00:39:32.977100.