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Shares of Texas Instruments outperformed the S&P thanks to strong sales growth

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Texas Instruments Incorporated (NASDAQ: TXN) The share price increased 1.9 times from $94 at the end of 2018 to about $179 today, mainly due to the sale and favorable change in P/S multiple. During the period, the company, a designer and manufacturer of semiconductors and various integrated circuits, saw a strong 28% increase in sales and a 34% increase in revenue per share, even as the number of shares outstanding fell 4.3%. In addition, the S&P 500 returned nearly 60% during the same period, meaning TXN stocks have outperformed the index since late 2018.

In our interactive dashboard Why Texas Instruments shares moved: TXN stock is up 89% since 2018We analyze the factors behind the move.

Texas Instruments

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Total revenue on an LTM basis grew 28% to $20.2 billion from $15.8 billion in FY2018

  • TI’s total revenue initially fell from $15.8 billion in FY’18 to less than $14.4 billion in FY’19 as a glut of semiconductors hampered revenue growth.
  • However, revenues have since risen again to $18.3 billion in FY21, which is currently over $20.2 billion on an LTM basis.
  • TI’s largest segment is its analog semiconductor segment, which grossed $14.05 billion in FY21, accounting for more than 75% of the company’s total revenue.
  • For more information on TI’s earnings and peer comparison, see Texas Instruments Earnings Comparison

Earnings per share grew 34% from $16.45 in fiscal 2018 to $21.99 today

  • Texas Instruments’ revenue grew from $15.8 billion in 2018 to $20.2 billion today, while the number of shares outstanding decreased from approximately 959.3 million in 2018 to 918 million today.
  • This has increased the RPS from $16.45 in FY18 to $21.99 today.

The price-to-sales multiple (P/S) for Texas Instruments increased from 5.7x at the end of 2018 to 10.5x at the end of 2020, but is currently back at 8.1x, still below 2018 levels, about 1.4 times higher .

  • TI’s P/S multiple rose sharply to 10.5x by the end of 2020 on rising investor expectations of a rebound in revenue growth amid increased demand for the company’s products.
  • However, due to the current geopolitical tensions and growing economic uncertainty in the broader markets, the P/S multiple has fallen and currently stands at around 8.1x.
  • For more information on the company’s stock returns and comparisons with peers, see Texas Instruments Equity Return Comparison,

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