Analyst Derrick Wood of TD Cowen maintained a Hold rating on Teradata, boosting the price target to $25.00.
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Derrick Wood has given his Hold rating due to a combination of factors that reflect both positive developments and ongoing uncertainties for Teradata. The company reported a solid third-quarter performance with ARR growth exceeding expectations and stable revenue guidance for FY25. However, the growth in cloud ARR remains a concern due to questions about its long-term sustainability amidst declining net revenue retention rates.
Additionally, while there is a noticeable increase in demand for hybrid cloud solutions and AI-focused deployments, the transition from on-premises to cloud environments is still in flux for many customers. This uncertainty, coupled with unchanged revenue and free cash flow estimates, suggests limited immediate upside potential. As a result, Derrick Wood maintains a Hold rating, reflecting a cautious outlook despite some positive operational improvements.