Investment Thesis
TE Connectivity demonstrates solid fundamental health with robust profitability metrics (20.6% operating margin, 16.1% net margin) and strong revenue growth of 8.9% YoY. The company maintains excellent financial stability with low leverage (0.37x debt/equity), strong interest coverage (26.0x), and positive free cash flow generation ($607M), supporting both operational sustainability and capital allocation flexibility.
TEL Strengths
- Strong operating and net margins (20.6% and 16.1% respectively) indicate efficient cost management and pricing power
- Solid revenue growth of 8.9% YoY demonstrates market demand and competitive positioning
- Excellent financial health with low debt/equity ratio (0.37x) and exceptional interest coverage (26.0x) providing financial flexibility
- Positive free cash flow of $607M with 13.0% FCF margin supports capital allocation, debt reduction, and shareholder returns
- Healthy liquidity position with 1.65x current ratio and 1.07x quick ratio indicating ability to meet short-term obligations
TEL Risks
- Flat net income growth (0% YoY) despite 8.9% revenue growth suggests margin compression or expense acceleration requiring monitoring
- Significant diluted EPS decline of 40.4% YoY indicates substantial share dilution or reduced per-share profitability
- Moderate ROE (5.8%) and ROA (2.9%) suggest capital is not being deployed with optimal efficiency despite strong margins
- Electronic components sector exposure to cyclical demand and supply chain volatility typical of wholesale distribution
- Capital intensity with $258M capex annually may limit financial flexibility in economic downturns
Key Metrics to Watch
- Operating margin trend - watch for continued compression relative to revenue growth
- Free cash flow sustainability and conversion rates as primary cash generation indicator
- Debt/equity ratio and interest coverage maintenance to ensure financial flexibility preservation
- Revenue growth acceleration and net income margin expansion to improve per-share profitability metrics
- Return on equity improvement through better capital deployment efficiency
TEL Financial Metrics
TEL Profitability Ratios
TEL Balance Sheet & Liquidity
TEL 5-Year Financial Trend
5-Year Trend Summary: TE Connectivity plc's revenue has grown significantly by 16% over the 5-year period, indicating strong business expansion. The most recent EPS of $6.03 reflects profitable operations.
TEL Growth Metrics (YoY)
TEL Quarterly Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q1 2026 | $3.8B | $528.0M | $1.75 |
| Q3 2025 | $4.0B | $573.0M | $1.86 |
| Q2 2025 | $4.0B | $13.0M | $0.04 |
| Q1 2025 | $3.8B | $528.0M | $1.75 |
| Q3 2024 | $4.0B | $528.0M | $1.67 |
| Q2 2024 | $4.0B | $433.0M | $1.36 |
| Q1 2024 | $3.8B | $397.0M | $1.24 |
| Q3 2023 | $4.0B | $528.0M | $1.67 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
TEL Capital Allocation
TEL SEC Filings
Access official SEC EDGAR filings for TE Connectivity plc (CIK: 0001385157)