Is Texas Instruments Incorporated (TXN) overvalued?
On Equity Rank's model estimate, TXN trades 72% above its fair value. Texas Instruments Incorporated (TXN) last closed at $277.36; the multi-method model fair value is $160.78.
| Price | Model fair value | Price vs model |
|---|---|---|
| $277.36 | $160.78 | 73% above |
What the answer rests on
- 0 of 11 valuation methods put TXN's value above its price and 11 put it below, so the methods mostly agree.
- To justify today's price, TXN's free cash flow would need to grow about 33.1% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew -24.0% a year.
- Over the past year the price sat below the model fair value on 0% of trading days. The gap ranged from 6% above to 107% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind TXN's fair value · What prices assume · Other companies