TEXAS INSTRUMENTS INC (TXN) Ranks High in Martin Zweig's Growth Investor Model

Texas Instruments (TXN) has a 69% rating based on Martin Zweig's Growth Investor model. The stock meets several criteria, including persistent accelerating earnings and sales growth, reasonable valuations, and low debt. However, it fails in some areas, such as earnings persistence and long-term EPS growth. The stock's P/E ratio is reasonable, and its quarterly earnings have been positive.

Texas Instruments (TXN), a leading semiconductor company, has recently garnered attention for its upcoming July 22, 2025 earnings announcement. The stock has received a 69% rating based on Martin Zweig's Growth Investor model, indicating a notable level of interest according to the published strategy. This model evaluates growth stocks with persistent accelerating earnings and sales growth, reasonable valuations, and low debt.

The stock meets several criteria of the model, including a reasonable P/E ratio and positive quarterly earnings. However, it fails in areas such as earnings persistence and long-term EPS growth. This indicates that while TXN shows strong current performance and growth potential, there are concerns about the sustainability of these gains over the long term.

Investors should be aware of the company's premium valuation, which is a primary risk factor. The recent announcement of a $60 billion investment in seven US semiconductor fabs aligns with Texas Instruments' push to bolster its manufacturing base, potentially enhancing supply chain reliability. However, this significant investment may also introduce cost concerns and sector competition.

The company projects $21.9 billion in revenue and $7.5 billion in earnings by 2028, requiring a 10.9% yearly revenue growth and a $2.7 billion earnings increase from the current $4.8 billion. These forecasts suggest a fair value of $177.32, a 19% downside from the current price.

Investors should consider the varying perspectives on TXN's valuation. Some analysts estimate revenue growth at just 3.5% per year, with price targets as low as $125, highlighting concerns around supply chain complexity and margin pressure. Other analysts, however, project a more optimistic outlook, with fair value estimates varying widely.

In conclusion, while Texas Instruments shows strong potential for growth and resilience, investors should be mindful of the risks associated with its premium valuation and the sustainability of its earnings growth. The company's recent expansion plans and investment in US fabs may support long-term growth, but the impact remains to be seen.

References:
[1] https://simplywall.st/stocks/us/semiconductors/nasdaq-txn/texas-instruments/news/how-anticipation-for-july-earnings-will-impact-texas-instrum
[2] https://www.nasdaq.com/articles/valideas-top-information-technology-stocks-based-martin-zweig-7-11-2025