Price to FCFE (P/FCFE)
Free Cash Flow to Equity (FCFE)
Texas Instruments Inc., FCFE calculation
US$ in millions
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
The financial information reveals trends in cash flows from operating activities and free cash flow to equity (FCFE) over a five-year period. Cash flows from operating activities demonstrate initial stability followed by a decline, while FCFE exhibits a more pronounced downward trajectory.
- Cash Flows from Operating Activities
- Cash flows from operating activities remained relatively consistent between 2021 and 2022, at approximately US$8.756 billion and US$8.720 billion, respectively. A notable decrease is observed in 2023, falling to US$6.420 billion. This decline continues into 2024, reaching US$6.318 billion, before a modest recovery to US$7.153 billion in 2025. The overall trend suggests a weakening in the company’s ability to generate cash from its core business operations after 2022.
- Free Cash Flow to Equity (FCFE)
- FCFE experienced a consistent decline throughout the observed period. Starting at US$7.239 billion in 2021, it decreased to US$6.917 billion in 2022. The rate of decline accelerated in 2023, with FCFE falling to US$3.849 billion. A slight increase is noted in 2024, reaching US$3.878 billion, but this is followed by a further decrease to US$3.052 billion in 2025. This consistent downward trend indicates a diminishing capacity to distribute cash to equity holders.
The decrease in FCFE appears to be more significant than the decrease in cash flows from operating activities, suggesting that factors beyond core operational performance, such as changes in capital structure or investments, are contributing to the reduction in cash available to equity investors. The slight recovery in operating cash flow in 2025 does not translate into a similar recovery in FCFE, reinforcing this observation.
Price to FCFE Ratio, Current
Texas Instruments Inc., current P/FCFE calculation, comparison to benchmarks
| No. shares of common stock outstanding | 907,550,774 |
| Selected Financial Data (US$) | |
| Free cash flow to equity (FCFE) (in millions) | 3,052) |
| FCFE per share | 3.36 |
| Current share price (P) | 221.44 |
| Valuation Ratio | |
| P/FCFE | 65.85 |
| Benchmarks | |
| P/FCFE, Competitors1 | |
| Advanced Micro Devices Inc. | 48.48 |
| Analog Devices Inc. | 29.45 |
| Applied Materials Inc. | 42.69 |
| Broadcom Inc. | 65.49 |
| Intel Corp. | — |
| KLA Corp. | 63.22 |
| Lam Research Corp. | 58.79 |
| Micron Technology Inc. | 300.36 |
| NVIDIA Corp. | 75.59 |
| Qualcomm Inc. | 11.31 |
| P/FCFE, Sector | |
| Semiconductors & Semiconductor Equipment | 98.08 |
| P/FCFE, Industry | |
| Information Technology | 49.96 |
Based on: 10-K (reporting date: 2025-12-31).
1 Click competitor name to see calculations.
If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.
Price to FCFE Ratio, Historical
Texas Instruments Inc., historical P/FCFE calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 907,550,774 | 910,332,971 | 909,287,673 | 906,205,795 | 923,547,062 | |
| Selected Financial Data (US$) | ||||||
| Free cash flow to equity (FCFE) (in millions)2 | 3,052) | 3,878) | 3,849) | 6,917) | 7,239) | |
| FCFE per share3 | 3.36 | 4.26 | 4.23 | 7.63 | 7.84 | |
| Share price1, 4 | 221.44 | 183.03 | 159.20 | 182.29 | 171.42 | |
| Valuation Ratio | ||||||
| P/FCFE5 | 65.85 | 42.96 | 37.61 | 23.88 | 21.87 | |
| Benchmarks | ||||||
| P/FCFE, Competitors6 | ||||||
| Advanced Micro Devices Inc. | 46.56 | 109.67 | 241.70 | 33.46 | 44.72 | |
| Analog Devices Inc. | 23.16 | 29.30 | 22.28 | 24.14 | 34.67 | |
| Applied Materials Inc. | 34.31 | 17.05 | 17.53 | 19.17 | 27.20 | |
| Broadcom Inc. | 64.89 | 26.03 | 30.06 | 14.62 | 22.35 | |
| Intel Corp. | — | — | — | — | 14.25 | |
| KLA Corp. | 40.35 | 25.11 | 26.78 | 9.01 | 28.05 | |
| Lam Research Corp. | 26.31 | 25.89 | 18.67 | 24.95 | 34.58 | |
| Micron Technology Inc. | 142.55 | — | — | 18.66 | 37.24 | |
| NVIDIA Corp. | 53.74 | 65.45 | 151.07 | 54.83 | 35.22 | |
| Qualcomm Inc. | 14.86 | 18.57 | 11.97 | 19.13 | 17.93 | |
| P/FCFE, Sector | ||||||
| Semiconductors & Semiconductor Equipment | — | 45.81 | 47.55 | 29.02 | 24.87 | |
| P/FCFE, Industry | ||||||
| Information Technology | — | 36.63 | 33.18 | 26.93 | 27.31 | |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 Data adjusted for splits and stock dividends.
3 2025 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= 3,052,000,000 ÷ 907,550,774 = 3.36
4 Closing price as at the filing date of Texas Instruments Inc. Annual Report.
5 2025 Calculation
P/FCFE = Share price ÷ FCFE per share
= 221.44 ÷ 3.36 = 65.85
6 Click competitor name to see calculations.
The Price to Free Cash Flow to Equity (P/FCFE) ratio exhibits a notable increasing trend over the observed period. This trend is driven by changes in both share price and free cash flow per share, though not consistently in the same direction.
- Share Price
- The share price demonstrated initial growth, increasing from US$171.42 in 2021 to US$182.29 in 2022. A subsequent decline to US$159.20 was observed in 2023, followed by recovery to US$183.03 in 2024 and further growth to US$221.44 in 2025. This indicates price volatility over the period.
- FCFE per Share
- Free cash flow per share experienced a slight decrease from US$7.84 in 2021 to US$7.63 in 2022. A more substantial decline occurred in 2023, falling to US$4.23, and remained relatively stable at US$4.26 in 2024. Further reduction to US$3.36 was noted in 2025. This suggests a weakening trend in cash flow generation relative to each share.
- P/FCFE Ratio
- The P/FCFE ratio increased from 21.87 in 2021 to 23.88 in 2022. A significant jump to 37.61 occurred in 2023, followed by a further increase to 42.96 in 2024. The most substantial increase was observed in 2025, reaching 65.85. This escalating ratio suggests that the market is placing a progressively higher valuation on each dollar of free cash flow available to equity holders. The increase is attributable to the combination of share price fluctuations and the declining FCFE per share, with the latter contributing more significantly to the ratio’s growth in later years.
The observed trend in the P/FCFE ratio warrants further investigation. While a rising ratio can indicate investor confidence, the concurrent decline in FCFE per share suggests potential concerns regarding the company’s ability to generate cash flow. The increasing ratio could also indicate overvaluation, particularly given the decreasing cash flow available to equity holders.