Is Texas Instruments (TXN) Overvalued or Undervalued? A Complete Valuation Analysis 2026

The short answer

Short answer: Texas Instruments looks overvalued at current levels. Compared with the recent share price of $285.24, the current DCF output near $76.94 suggests Texas Instruments is about 270.7% overvalued on these cash flow assumptions. Texas Instruments is being valued in the context of a business with gross margin near 57.3%, which helps show what kind of operating model investors are paying for. That leaves TXN looking rich unless the next leg of earnings or cash flow growth arrives fast enough to justify the current price.

Why valuing this kind of technology company is more complex than it looks

Texas Instruments operates in Semiconductors. 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 Texas Instruments

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 TXN, the current reading is 52.3x. Shows what the market is paying for TXN's recent earnings.

Forward P/E

Forward P/E uses expected earnings instead of trailing earnings. For TXN, the current reading is 149.4x. Shows how the market is valuing TXN's expected earnings.

PEG ratio

PEG compares the earnings multiple with expected growth. For TXN, the current reading is 4.6x. Helps show whether the earnings multiple is being offset by expected growth.

EV/EBITDA

EV/EBITDA compares enterprise value with operating profit before depreciation and amortization. For TXN, the current reading is 20.6x. Adds a capital structure aware check on operating valuation.

Price to sales

Price to sales compares market value with revenue. For TXN, the current reading is 14.1x. 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 TXN, the current reading is 1.4%. Shows how much cash TXN is generating relative to its market value.

Metric	Current value	What it suggests
Trailing P/E	52.3x	Shows what the market is paying for TXN's recent earnings.
Forward P/E	149.4x	Shows how the market is valuing TXN's expected earnings.
PEG ratio	4.6x	Helps show whether the earnings multiple is being offset by expected growth.
EV/EBITDA	20.6x	Adds a capital structure aware check on operating valuation.
Price to sales	14.1x	Useful when revenue mix, margins, or future scaling matter as much as near term earnings.
Free cash flow yield	1.4%	Shows how much cash TXN is generating relative to its market value.
Gross margin	57.3%	Shows how much of TXN's revenue remains after direct costs.
Revenue growth	13.0%	Shows whether TXN'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.

Texas Instruments's valuation breakdown

As of Q2 2026, Texas Instruments traded near $285.24 with a market value near $259.59B.

Metric	Current value	What it suggests
Trailing P/E	52.3x	Shows what the market is paying for TXN's recent earnings.
Forward P/E	149.4x	Shows how the market is valuing TXN's expected earnings.
PEG ratio	4.6x	Helps show whether the earnings multiple is being offset by expected growth.
EV/EBITDA	20.6x	Adds a capital structure aware check on operating valuation.
Price to sales	14.1x	Useful when revenue mix, margins, or future scaling matter as much as near term earnings.
Free cash flow yield	1.4%	Shows how much cash TXN is generating relative to its market value.
Gross margin	57.3%	Shows how much of TXN's revenue remains after direct costs.
Revenue growth	13.0%	Shows whether TXN'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 TXN is the gap between trailing and forward earnings valuation. Trailing P/E is near 52.3x while forward P/E is near 149.4x, which tells you the market is already underwriting a specific earnings path.

TXN'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.
TXN's PEG ratio near 4.6x matters because it tests whether the earnings multiple is being balanced by a credible growth rate.
TXN's price to sales multiple near 14.1x needs to be read beside revenue growth near 13.0%, because rich revenue multiples only hold up when growth quality stays intact.

Texas Instruments's competitive position

Texas Instruments Incorporated designs, manufactures, and sells semiconductors to electronics designers and manufacturers worldwide.

What would make Texas Instruments look cheaper or more expensive?

What would make it look cheaper

TXN would look cheaper if the business kept growing while valuation multiples moved lower.
TXN would also look more attractive if cash generation improved without the market price rising at the same pace.

What would make it look expensive

TXN would look expensive if earnings or revenue expectations softened while the current multiple stayed elevated.
TXN would also look expensive if margins weakened but the stock kept the same quality premium.

Technology valuation context

Texas Instruments operates in Semiconductors. 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

Texas Instruments looks priced for a very strong execution path from here. The stock can still work, but future earnings and cash flow need to validate the premium already in the shares. With forward P/E near 149.4x, 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 TXN's live valuation profile, stock page, and related company analysis.

Analyze TXN on TopTier Strategy View TXN stock page

Frequently asked questions

Is Texas Instruments stock overvalued in 2026?

Based on the current research read, Texas Instruments looks overvalued in 2026. The main drivers in this read are trailing P/E near 52.3x and forward P/E near 149.4x, gross margin near 57.3%, free cash flow yield near 1.4%. Texas Instruments is being valued in the context of a business with gross margin near 57.3%, which helps show what kind of operating model investors are paying for.

Is Texas Instruments a good stock to buy right now?

Texas Instruments can still work for investors who believe the next few years will be stronger than the market already expects, but the current setup leaves less room for disappointment.

What is Texas Instruments's fair value?

A fair value estimate depends on the mix of earnings, growth, margins, and cash generation rather than on a single published number. For Texas Instruments, the current read is shaped mainly by trailing P/E near 52.3x and forward P/E near 149.4x, gross margin near 57.3%, free cash flow yield near 1.4%. This article does not publish a stand alone fair value number unless there is a clearly supportable public methodology behind it.

Can you value Texas Instruments just on P/E?

No. Texas Instruments needs to be read through multiple valuation lenses, including forward earnings, revenue multiples, cash flow, and business quality.

Where can I analyze TXN with current data?

Use the TopTier Strategy research platform at toptierstrategy.com/research to review live valuation, profitability, financial health, shareholder returns, and growth data for TXN.

Data source: TopTier Strategy research platform - toptierstrategy.com/research. Data as of 2026-05-08T00:25:23.264470.