These three chip companies are undervalued ahead of Q3 earnings reports
The next earnings season will be getting started in a couple of weeks when big banks report third quarter results. The following week, October 21-25, there will be a number of semiconductor companies reporting results and there are three in particular that undervalued based on the Tickeron Valuation Rating and have solid sales growth, profit margins, and return on equity.
Texas Instruments (Nasdaq: TXN) is set to report on October 22. Its valuation rating is a 23 and that indicates that the company is slightly undervalued in the industry. A rating of 1 points to the most undervalued stocks, while a rating of 100 points to the most overvalued stocks. Texas Instruments’ P/B Ratio (14.16) is slightly higher than the industry average of (3.27). P/E Ratio (23.51) is within average values for comparable stocks, (80.28). Projected Growth (PEG Ratio) (0.83) is also within normal values, averaging (2.13). TXN has a moderately high Dividend Yield (2.03) as compared to the industry average of (0.68). TXN's P/S Ratio (7.18) is slightly higher than the industry average of (4.06).
We see on the chart that the stock has been trending higher since the December low and it is in overbought territory based on the weekly stochastic readings. With the overall market struggling in the last few days, we could see the indicators drop down a little and that would bring the stochastics down out of overbought territory.
The Tickeron SMR rating for this company is 11 and that indicates very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents.
Xilinx (Nasdaq: XLNX) is set to report on October 23. The Tickeron Valuation Rating of 21 indicates that the company is slightly undervalued in the industry. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (8.84) is normal, around the industry mean (3.27). P/E Ratio (25.19) is within average values for comparable stocks, (80.28). Projected Growth (PEG Ratio) (0.43) is also within normal values, averaging (2.13). XLNX has a moderately high Dividend Yield (1.94) as compared to the industry average of (0.68). XLNX's P/S Ratio (9.43) is slightly higher than the industry average of (4.06).
Unlike Texas Instrument, Xilinx has been trending lower since April. In fact the big downward swing that started in April came after the first quarter earnings report and the downswing that started in July came after the second quarter earnings results. While Texas Instruments is in overbought territory, Xilinx is in oversold territory based on the weekly stochastic readings and the 10-week RSI is the lowest it has been in the last three and a half years.
The SMR rating for this company is 15, indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents.
Intel (Nasdaq: INTC) is scheduled to report on October 24 and its valuation rating is 7. This indicates that the company is seriously undervalued in the industry. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (3.00) is normal, around the industry mean (3.27). P/E Ratio (11.83) is within average values for comparable stocks, (80.28). Projected Growth (PEG Ratio) (0.21) is also within normal values, averaging (2.13). INTC has a moderately high Dividend Yield (2.33) as compared to the industry average of (0.68). P/S Ratio (3.08) is also within normal values, averaging (4.06).
The chart for Intel is almost a mix between those of Texas Instruments and Xilinx. The stock was trending higher from its December low before falling sharply in April like Xilinx did. Unlike Xilinx, the stock appears to have re-established an upward trend over the last five months. The stock was approaching overbought territory, but a little selling the last few weeks has moved the indicators down.
TXN's Stochastic Oscillator sits in oversold zone for 4 days
The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an uptrend is expected.
Technical Analysis (Indicators)
Bullish Trend Analysis
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where TXN advanced for three days, in of 296 cases, the price rose further within the following month. The odds of a continued upward trend are .
TXN may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
The Aroon Indicator entered an Uptrend today. In of 233 cases where TXN Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on January 24, 2025. You may want to consider selling the stock, shorting the stock, or exploring put options on TXN as a result. In of 104 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .
The Moving Average Convergence Divergence Histogram (MACD) for TXN turned negative on January 27, 2025. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 45 similar instances when the indicator turned negative. In of the 45 cases the stock turned lower in the days that followed. This puts the odds of success at .
TXN moved below its 50-day moving average on January 24, 2025 date and that indicates a change from an upward trend to a downward trend.
The 50-day moving average for TXN moved below the 200-day moving average on January 28, 2025. This could be a long-term bearish signal for the stock as the stock shifts to an downward trend.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where TXN declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is slightly undervalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (9.747) is normal, around the industry mean (11.094). P/E Ratio (34.723) is within average values for comparable stocks, (59.662). Projected Growth (PEG Ratio) (1.747) is also within normal values, averaging (2.662). Dividend Yield (0.030) settles around the average of (0.021) among similar stocks. P/S Ratio (10.604) is also within normal values, averaging (48.807).
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 71, placing this stock better than average.
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. TXN’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
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General Information
a manufacturer of integrated circuit semiconductors and calculators
Industry Semiconductors