10Y annualized return is
positive but below market average
at 7.7% per year
TEL has met or exceeded earnings expectations in
all
recent quarters (10/10)
Reasonable Price-to-Earnings Ratio
Attractive Price-to-Sales Ratio
Strong Return on Equity
Healthy Profit Margins
Low Debt Levels
Strong Interest Coverage
Good Liquidity Ratios
🏆 Strong Financial Performance
🔑 Competitive Positioning
📈 Innovation Leadership
🚀 Growth in Industrial Segment
🔋 Electrification Momentum
High Price-to-Book Ratio
Elevated EV/EBITDA Ratio
Moderate Operating Profit Margin
Cash Ratio Indicates Limited Cash Reserves
⚠️ Currency Headwinds
📉 Uncertain Market Conditions
TE Connectivity demonstrates strong business quality through robust financial performance, competitive positioning, and innovation focus. However, it faces challenges from currency headwinds and uncertain market conditions that may impact future growth. The company has significant potential in its Industrial Solutions segment and the electrification trend in the automotive industry.
Analysis Date: January 22, 2025
Last Updated: March 12, 2025
Past performance does not guarantee future results. The data presented is indicative and may not be updated in real-time.
TE Connectivity Ltd. makes and sells parts that help connect different devices and machines. They create products like connectors, sensors, and cables that are used in cars, airplanes, and various types of equipment. Their solutions support industries like transportation, healthcare, and communications. With operations in many countries, they provide essential components that help technology work better.
Streams of revenue
Geographic Distribution
Core Products
Business Type
Business to Business
Competitive Advantages
Key Business Risks
Latest News
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Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
$246.97
Current Market Price: $121.74
IV/P Ratio: 2.03x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
51.0%
Graham recommended a minimum of 20-30% margin of safety
Higher values indicate a greater potential discount to fair value
Graham Criteria Checklist
Benjamin Graham's value investing checklist for TEL
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (19.02)
P/B ratio ≤ 1.5 (2.94)
Current ratio ≥ 2.0 (1.68x)
Long-term debt < Net current assets (1.08x)
Margin of safety (51.0%)
TEL does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
26.11%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-30)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
34.70%
Higher values indicate better efficiency in production
TTM (as of 2025-04-30)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
12.10%
Higher values indicate better overall profitability
TTM (as of 2025-04-30)
A return on equity (ROE) of 15.39% indicates effective management in generating profits from shareholders' equity.
Gross profit margin of 34.70% and net profit margin of 12.10% indicate efficient management and strong profitability relative to sales.
An operating profit margin of 18.64% is respectable but could be improved further for better operational efficiency.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
0.34x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q1 2025
Current Ratio
Current assets divided by current liabilities
1.68x
Higher values indicate better short-term liquidity
Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good
Q1 2025
A debt-to-equity ratio of 0.34 indicates that the company is not overly reliant on debt, which enhances financial stability.
The interest coverage ratio of 50.93 signifies that the company can comfortably cover its interest expenses, indicating solid earnings.
Current ratio of 1.68 and quick ratio of 1.10 demonstrate strong liquidity positions, ensuring the company can meet short-term obligations.
A cash ratio of 0.28 may indicate that the company has limited cash reserves to cover current liabilities, which could be a concern in downturns.
Meeting Expectations
Higher values indicate better execution and credibility
Recent Results
EPS
TE Connectivity reported record adjusted operating margin of 19.4% and a record first-quarter free cash flow of $674 million, showcasing effective cost management and operational efficiency.
TE's strategy focuses on regional manufacturing, with 80% of production localized to customer supply chains, providing a competitive edge in responsiveness to local market needs.
The company maintains an emphasis on innovation, particularly in AI and electrification, which are seen as key growth areas for future revenue expansion.
The stronger dollar is expected to create over $300 million in year-over-year currency exchange headwinds, impacting revenue negatively.
The Industrial Solutions segment experienced double-digit growth, particularly from the digital data networks business, indicating robust demand in emerging technologies.
Continued growth in hybrid and electric vehicle production, particularly in Asia, supports TE's content growth expectations in the automotive segment.
Global economic uncertainty and uneven market conditions may hinder growth, particularly in the automotive segment where production is expected to decline.