Texas Instruments Inc. (NASDAQ:TXN)

The analysis of the financial ratios over the presented quarters reveals several notable trends in valuation metrics.

Price to Earnings (P/E) Ratio

The P/E ratio data begins from March 31, 2020, and shows a general decline from 27.95 to a low of 16.05 by December 31, 2022. This downward trend implies that the market's earnings valuation became more conservative or earnings improved relative to price. However, from early 2023 onwards, the P/E ratio rises again, peaking at 37.07 by December 31, 2024, before slightly moderating to 34.52 by June 30, 2025. This increase suggests growing investor optimism about future earnings or a rising share price relative to earnings during this period.

Price to Operating Profit (P/OP) Ratio

The P/OP ratio follows a pattern similar to the P/E ratio, starting at 26.53 in March 2020 and generally decreasing to 13.69 by December 2020, then stabilizing at slightly higher values with fluctuations. After a low point in 2022, the ratio increases markedly to 32.74 by December 2024, before a slight reduction to 29.91 by mid-2025. This trend indicates an initial market correction to operating profit valuations followed by renewed confidence or growth expectations in operating profits driving higher multiples.

Price to Sales (P/S) Ratio

The P/S ratio mirrors the earlier trends, starting around 10.81 in March 2020 and declining steadily to 7.1 by December 2022, reflecting a lower price relative to sales or improved sales performance. From 2023 forward, it climbs again, reaching a peak of 11.71 at December 2024, then declining slightly to 10.43 by mid-2025. This suggests increasing revenue expectations or improved market sentiment leading to a higher valuation relative to sales.

Price to Book Value (P/BV) Ratio

Unlike the other ratios, the P/BV ratio starts higher at 13.29 with a progression to a peak near 17.02 in December 2020, followed by a continuous decline to a low of 7.74 by September 2023. Subsequently, a rise occurs, reaching 10.66 by December 2024, before modestly declining again to 10.61 by mid-2025. This pattern may reflect changes in investors’ perceptions of the company’s net asset value or accounting valuations adjusting through different market conditions.

Overall, the company experienced an initial period of declining valuation multiples from 2020 through around 2022, which may indicate improving operational performance or more cautious market pricing. From 2023 onwards, these valuation ratios generally increase, signaling heightened investor confidence, expectations of stronger earnings, operating profit growth, and sales expansion. The P/BV ratio, while behaving somewhat differently, confirms shifts in asset valuation perceptions over the same periods.

The financial data reflects notable fluctuations and trends in share price, earnings per share (EPS), and the price-to-earnings (P/E) ratio over the analyzed quarters. The period starts with the share price at approximately $112 in March 2020, rising to a peak around $187 by September 2021, followed by several oscillations with a notable decline to approximately $142 in September 2023. The most recent figures indicate a recovery, with the share price increasing again to about $191 as of June 2025.

Earnings per share (EPS) data shows a clear upward trajectory from around 6.08 in March 2021 to a peak near 9.83 in December 2022, implying a period of strong profitability growth. After this peak, EPS gradually declines, reaching a low near 5.27 in June 2025, which may suggest decreasing profitability or higher expenses impacting earnings in the later periods.

The P/E ratio exhibits a decreasing trend from 27.95 in March 2021 to 16.05 in December 2022, coinciding with the rise in EPS and indicating that the market valuation adjusted relative to earnings growth, possibly reflecting improved earnings stability or changes in investor sentiment. Subsequently, the P/E ratio increases significantly, reaching levels above 34 by December 2024, before slightly moderating to approximately 30 by June 2025. This upward movement in the P/E ratio amidst declining EPS might suggest market expectations of future earnings growth or other factors affecting valuation.

Share Price Trend

Initial growth through 2020 into 2021, peaking near $187, followed by volatility with a dip below $150 in late 2023, and recovery upwards to approximately $191 by mid-2025.

Earnings per Share (EPS) Trend

Steady increase from early 2021, peaking late 2022, then consistent decline through mid-2025, signaling a peak in profitability followed by contraction.

P/E Ratio Trend

Decreasing from 28 to around 16 through late 2022 alongside rising EPS, then rising sharply over subsequent periods to peak above 37 before softening slightly, indicating changes in market valuation relative to earnings.

Relationship Among Metrics

Increasing EPS initially drove lower P/E ratios despite rising share prices, reflecting improving earnings power. Later, declining EPS paired with rising P/E ratios implies increased market optimism or other valuation factors decoupling share price from current earnings.

The share price exhibited a general upward trend from the first quarter of 2020 through the second quarter of 2021, rising from approximately $112 to nearly $184. After reaching this peak, the price showed increased volatility and occasional declines, dropping to around $141 by the third quarter of 2023 before recovering again to above $190 in mid-2025. The fluctuations suggest periods of market correction or changing investor sentiment following rapid earlier gains.

Operating profit per share was first reported in the first quarter of 2021 at $6.40 and showed a consistent increase over the subsequent four quarters, peaking at $11.53 in the last quarter of 2022. This indicates a strong growth phase in operational profitability during 2021 and 2022. However, from 2023 onwards, there was a gradual decline in operating profit per share, decreasing to approximately $6.40 by the second quarter of 2025, reflecting potential operational challenges or market pressures impacting profitability.

The price-to-operating profit ratio (P/OP) provides insight into market valuation relative to operating earnings. Initially observed at 26.53 in the first quarter of 2021, the ratio declined steadily, reaching a low of 13.69 in the final quarter of 2022. This decline corresponds with rising operating profits and a relatively stable share price, suggesting improved market valuation efficiency. From 2023 forward, the P/OP ratio increased markedly, peaking above 32.74 by the third quarter of 2024 before declining slightly. The increase in this ratio amid declining operating profits indicates share prices were valued more richly relative to earnings, potentially driven by investor optimism or external factors unrelated to current profitability.

The share price demonstrates notable fluctuations throughout the observed periods. Initially, it rises steadily from approximately 112 US dollars to a peak near 187 US dollars by September 2021. Subsequently, it experiences some volatility, declining to around 141.79 US dollars by September 2023, before recovering to above 198 US dollars in June 2024. In the final periods, there is again a decline, with the share price ending at approximately 191.38 US dollars in June 2025.

Sales per share, recorded from March 2021 onward, display a generally declining trend. The figure starts at about 15.71 US dollars and peaks at 22.25 US dollars by December 2021. After reaching this high, sales per share gradually decrease, falling to a low near 17.18 US dollars by March 2025. In the last period, there is a slight rebound to 18.34 US dollars.

The price-to-sales (P/S) ratio, available from March 2021, reflects varying dynamics over time. Initially, it is near 10.81 and shows a downward trend until December 2021, reaching about 7.1. It then fluctuates, increasing to a maximum of approximately 11.71 by September 2024, before settling near 10.43 in June 2025. These variations suggest changing market valuations relative to the company’s sales.

Share Price Trends

The share price steadily increases in the early periods, peaks in late 2021, declines through late 2023, recovers through mid-2024, then declines again slightly afterward.

Sales per Share Trends

Sales per share rise steadily through 2021, peaking at the end of that year, followed by a gradual decline through 2025, with a minor uptick at the very end.

Price-to-Sales Ratio Trends

The P/S ratio declines from early 2021 to late 2021, subsequently showing volatility with a peak in late 2024, indicating fluctuating market valuation versus sales over the observed periods.

Insight on Market Valuation

The increase in the P/S ratio despite declining sales per share in later periods suggests market optimism or other factors supporting the share price beyond immediate sales performance.

The analysis of the quarterly financial data reveals several notable trends concerning the share price, book value per share (BVPS), and price-to-book value (P/BV) ratio over the specified periods.

Share Price

The share price demonstrated an overall upward trajectory from March 31, 2020, through June 30, 2024, with fluctuations along the way. Starting at $111.98, the price generally rose, peaking near $201.74 by September 30, 2024. Throughout this period, intermittent declines were observed, notably from December 31, 2021 ($171.42) to September 30, 2022 ($157.87), and again from June 30, 2023 ($176) to September 30, 2023 ($141.79). These decreases were followed by recoveries, indicating volatility and responsiveness to market conditions. The share price experienced a decline again after September 30, 2024 ($201.74) to March 31, 2025 ($162.13), before a slight increase to $191.38 by June 30, 2025.

Book Value Per Share (BVPS)

Bvps exhibited a consistent upward trend across the entire timeframe. Beginning at $8.43 on March 31, 2020, it steadily increased to $18.04 by June 30, 2025. This growth was gradual and continuous, reflecting accumulation of equity or retained earnings, or other changes in the company's net assets. Some periods showed a more pronounced increase, such as between March 31, 2020, and December 31, 2021, and again from March 31, 2023, through March 31, 2025, suggesting sustained enhancements in the company's fundamental value per share.

Price-to-Book Value Ratio (P/BV)

The P/BV ratio experienced a downward trend overall, starting from a high of 17.02 on December 31, 2020, and declining to notably lower levels by March 31, 2025 (8.98), before a slight uptick to 10.61 on June 30, 2025. Early in the period, the ratio was elevated, indicating a market valuation significantly above the book value, but this premium diminished over time. Periods of greater share price volatility corresponded to substantial fluctuations in the P/BV ratio, often moving inversely to BVPS gains. For instance, as BVPS increased steadily, intervals of share price decline led to temporary dips in the ratio, reflecting changes in investor sentiment and valuation multiples.

In summary, the data portrays steady growth in the underlying book value per share, indicating strengthening equity value for the company. The share price, while generally increasing over time, showed notable volatility with intermittent declines and recoveries. The P/BV ratio decreased considerably from elevated levels, suggesting a moderation in market valuation relative to the company's net asset value per share. These combined trends imply that the market initially priced the shares at a high premium, which has moderated as book value grew and share price fluctuations occurred.