Texas Instruments (TXN) 10-K Red Flags
Risk signals extracted deterministically from Texas Instruments’s SEC 10-K/10-Q XBRL filings — no LLM, every finding cites the underlying data.
Detected red flags (15)
- Inventory buildup exceeds sales growth: Inventory grew +13.2% vs revenue -12.5%. Excess inventory may signal weakening demand, potential write-downs, or supply chain overcommitment. Watch gross margin for discounting impact.
- Gross margin compression: Gross margin contracted +5.9%pp (from 68.8% to 62.9%). This may reflect input cost inflation, pricing pressure, or product mix shift toward lower-margin segments.
- Free cash flow deteriorating: FCF declined +77.2% YoY (from $5.92B to $1.35B). With OCF at $6.42B and capex at $5.07B, cash generation capacity is weakening — monitor for dividend/buyback sustainability.
- NEW: Off-balance sheet arrangements: Off-balance sheet arrangements appears in recent filings but not in the prior 24-month period. Monitor for materiality.
- Endogenous analysis: Free cash flow declined despite stable or rising capex, indicating the cash burn is operational rather than investment-driven. This is a structural concern — cost reduction or asset sales may be needed to restore FCF.
- Endogenous analysis: Inventory accumulation alongside margin compression is a classic demand-softening signal: excess inventory typically leads to discounting, which compresses margins further. Monitor for clearance events, write-downs, or guidance revisions.
- 1 new XBRL disclosure(s) in latest filing — expanding reporting scope.
- 20 disclosure(s) dropped from prior year — reduced reporting granularity.
- 1 new risk-language term(s) detected in filing text: Off-balance sheet arrangements.
- Revenue declined **+12.5%** YoY to $17.52B.
- Net margin at **37.16%** (contracting ▼).
- Market cap $266.73B at $293.08 per share.
- Trailing P/E 41.45, P/S 15.23, P/B 15.90.
- Inventory buildup exceeds sales growth: Inventory grew +13.2% vs revenue -12.5%. Excess inventory may signal weakening demand, potential write-downs, or supply chain overcommitment. Watch gross margin for discounting impact.
- Gross margin compression: Gross margin contracted +5.9%pp (from 68.8% to 62.9%). This may reflect input cost inflation, pricing pressure, or product mix shift toward lower-margin segments.
Filings & ownership
- Latest annual report (10-K) filed Feb 6, 2026.
- Latest quarterly report (10-Q) filed Apr 24, 2026.
- 10 recent 8-K material-event filings in the index.
- Recent insider Form 4s: 0 buy vs 0 sell transactions.
- 1 recent 13D activist/beneficial-ownership filings — potential catalyst.
- 19 recent 13G passive institutional ownership notices.
Full TXN analyst report
Valuation (DCF & Graham), technicals, macro exposure, risk scorecard and 13F/13D ownership.
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