ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. Texas Instruments's annualized return on capital (ROC %) for the quarter that ended in Mar. 2026 was 23.37%.
As of today (2026-06-24), Texas Instruments's WACC % is 14.48%. Texas Instruments's ROC % is 20.91% (calculated using TTM income statement data).
Texas Instruments generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.
Texas Instruments (NAS:TXN) ROC % Explanation
ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. The reason book values of debt and equity are used is because the book values are the capital the company received when issuing the debt or receiving the equity investments.
There are four key components to this definition. The first is the use of operating income or EBIT rather than net income in the numerator. The second is the tax adjustment to this operating income or EBIT, computed as a hypothetical tax based on an effective or marginal tax rate. The third is the use of book values for invested capital, rather than market values. The final is the timing difference; the capital invested is from the end of the prior year whereas the operating income or EBIT is the current year's number.
Why is ROC % important?
Because it costs money to raise capital. A firm that generates higher returns on investment than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.
As of today, Texas Instruments's WACC % is 14.48%. Texas Instruments's ROC % is 20.91% (calculated using TTM income statement data).
Texas Instruments generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.
Be Aware
Like ROE % and ROA %, ROC % is calculated with only 12 months of data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.
Texas Instruments ROC % Related Terms
Texas Instruments ROC % Historical Data
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The historical data trend for Texas Instruments's ROC % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Note:
The Operating Income data used here is four times the quarterly (Mar. 2026) data.
The tax rate is limited to between 0% and 100%.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Texas Instruments (TXN) has a ROC % of 23.37% as of Mar. 2026. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on Texas Instruments and its competitors.
Is Texas Instruments' ROC % too high?
Texas Instruments' current ROC % is 23.37%. The Semiconductors industry median ROC % is 3.71. Texas Instruments' value of 23.37% is 529.9% above this industry median. Overall, Texas Instruments has a GF Score™ of 81/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Texas Instruments' ROC % compare to QCOM and ADI?
Texas Instruments' ROC % of 23.37% can be compared against companies in the Semiconductors industry. The industry median ROC % is 3.71. Texas Instruments' value of 23.37% is 529.9% above this benchmark. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good ROC % for a Semiconductors company?
The median ROC % among Semiconductors companies is 3.71, based on 1,012 companies in the industry. Companies in the top quartile (top 25%) have a ROC % significantly above this median, while those in the bottom quartile fall well below. However, ROC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Texas Instruments's current ROC % of 23.37% is 529.9% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high ROC % mean?
A high ROC % can signal that a stock is expensive relative to its fundamentals. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on Texas Instruments and its competitors. For the Semiconductors industry, the median ROC % is 3.71 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Texas Instruments's current ROC % is 23.37%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Texas Instruments stock overvalued right now?
Based on GuruFocus' analysis, Texas Instruments (TXN) is currently considered Significantly Overvalued. The stock's GF Value™ is $212.39, compared to a current price of $303.50 — trading 42.9% above its estimated fair value. The current ROC % is 23.37% and 529.9% above the Semiconductors industry median of 3.71. Texas Instruments' overall GF Score™ is 81/100 with 10 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is ROC % calculated?
ROC % is calculated from a company's financial statements. For Texas Instruments (TXN), the current ROC % is 23.37% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Texas Instruments (TXN) Overvalued in 2026?
Based on GuruFocus' analysis, Texas Instruments stock appears to be overvalued.
The current stock price of $303.50 is trading 42.9% above its estimated GF Value™ of $212.39.
GuruFocus considers Texas Instruments to be Significantly Overvalued.
Key valuation signals for TXN:
ROC %: 23.37%
GF Value™: $212.39 vs. price of $303.50 (42.9% above fair value)
Industry Position: 529.9% above the Semiconductors median
No single metric tells the full story. See the TXN stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Dallas-based Texas Instruments generates over 95% of its revenue from semiconductors and the remainder from its well-known calculators. Texas Instruments is the world's largest maker of analog chips, which are used to process real-world signals such as sound and power. Texas Instruments also has a leading market share position in processors and microcontrollers used in a wide variety of electronics applications.
81GF Score
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