Teradata (TDC) AI Stock Analysis

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Teradata

(NYSE:TDC)

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Rating:74Outperform

Price Target:$37.00▲(8.25% Upside)

Action:reiterated

Date:11/06/26

TDC scores well primarily on financial strength: strong free cash flow and sharply reduced leverage support the balance sheet and shareholder returns. The earnings outlook is mixed—profitability and EPS guidance improved, but revenue remains flat-to-down with a weak Q4 comparison. Valuation is a positive tailwind due to the very low P/E, while technicals suggest only moderate momentum rather than a strong uptrend.

Positive Factors

Strong cash generationTeradata’s substantial operating and free cash flow supports internal funding for product development, cloud expansion and shareholder returns. Strong cash conversion also indicates that reported earnings are backed by cash, improving resilience and strategic flexibility over the next several quarters.

Negative Factors

Weak top-line growth outlookThe near-flat revenue outlook indicates that improved profitability is not yet supported by meaningful top-line expansion. Without stronger recurring growth, Teradata may have less operating leverage and fewer resources to sustain investment in cloud, AI products and competitive differentiation.

Teradata Key Performance Indicators (KPIs)

Revenue by GeographyBreaks down Teradata's revenue across regions to show where sales and growth are concentrated, revealing exposure to local economic cycles, currency swings, or dependence on large regional customers.

Chart Insights

Teradata's revenue from the Americas has been volatile, with a notable decline in late 2024 and a complete shift to zero in 2025, likely reflecting a strategic realignment. Concurrently, the United States and International segments have emerged, suggesting a restructuring of geographic reporting. Despite revenue challenges, Teradata's focus on AI and strategic partnerships, as highlighted in the earnings call, aims to drive long-term growth. However, the anticipated decline in Q3 ARR due to deal timing adjustments poses a short-term risk to revenue stability.

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Teradata (TDC) vs. SPDR S&P 500 ETF (SPY)

Market Cap: $3.12B
Dividend Yield: ―
Average Volume (3M): 1.88M
Price to Earnings (P/E): 6.9
Beta (1Y): 0.86
Revenue Growth: 1.39%
EPS Growth: 294.07%
Country: US
Employees: 5,100
Sector: Technology
Sector Strength: 61
Industry: Software - Infrastructure

Teradata Business Overview & Revenue Model

Company Description

Teradata Corporation, through its various entities, delivers a unified multi-cloud data platform specifically engineered for robust enterprise analytics. A cornerstone of its product suite is Teradata Vantage, a cutting-edge data platform designed to...

How the Company Makes Money

Teradata primarily makes money by selling subscriptions and services associated with its enterprise data analytics platform. 1) Subscription revenue (software) - Teradata’s core revenue stream is recurring subscription revenue for access to its analy...

Teradata Earnings Call Summary

Earnings Call Date:Nov 05, 2026(Q3-2026)|% Change Since:4.46%|Next Earnings Date:Feb 15, 2027

Earnings Call SentimentPositive

The call was broadly positive. Management highlighted year-to-date ARR progress, a 300-basis-point operating-margin improvement, 90% adjusted free cash flow growth, raised EPS and free cash flow outlooks, strong AI product benchmarks, customer interest and new-logo wins. These positives outweighed the Q3 year-over-year declines in recurring revenue, consulting revenue and margins, along with negative fourth-quarter revenue comparisons and modest total ARR growth.

Positive Updates

Strong Year-to-Date Operating Progress

Year to date, total ARR was positive every quarter, operating margin increased by 300 basis points, and adjusted free cash flow grew 90% versus the first three quarters of 2025.

Negative Updates

Modest Third-Quarter Total ARR Growth

Third-quarter total ARR grew 1% as reported and 2% in constant currency. Management said the majority of ARR expansion is still expected to occur in the fourth quarter.

Company Guidance

Teradata reaffirmed total ARR guidance of 2% to 4% and its ranges for adjusted free cash flow, while narrowing FY '26 total revenue guidance to the range of minus 1% to 0% year-over-year and recurring revenue guidance to the range of 1% to 2% growth year-over-year; non-GAAP earnings per share guidance increased to $2.86 to $2.90. For Q4 2026, recurring revenue is expected to be in the range of minus 2% to minus 4% year-over-year, total revenue is expected to be in the range of minus 4% to minus 6% year-over-year, and non-GAAP diluted earnings per share is expected to be in the range of $0.58 to $0.62, with a non-GAAP tax rate of approximately 26%, weighted average shares outstanding of about 94.8 million, and FY '26 other expenses now anticipated to be approximately $17 million; operating margin expansion is now expected to be approximately 200 basis points for the year, with the midpoint of adjusted free cash flow guidance at $340 million.

Teradata Financial Statement Overview

Summary

Overall fundamentals are solid, led by strong cash generation (TTM operating cash flow ~$758M and free cash flow ~$737M) and a meaningfully de-risked balance sheet (debt down to ~$96M with low debt-to-equity ~0.16). Profitability has stepped up sharply (net margin ~27% TTM), but the key risk is durability: revenue has been flat-to-down for years with a sharp TTM contraction, and both earnings/FCF show step-change behavior that may be hard to sustain without clearer top-line traction.

Income Statement

68Positive

Balance Sheet

76Positive

Cash Flow

82Very Positive

Financial statement breakdown
Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.67B	1.66B	1.75B	1.83B	1.79B	1.92B
Gross Profit	1.01B	993.00M	1.06B	1.11B	1.08B	1.19B
EBITDA	695.00M	268.00M	293.00M	263.00M	225.00M	367.00M
Net Income	456.00M	130.00M	114.00M	62.00M	33.00M	147.00M
Balance Sheet
Total Assets	1.60B	1.78B	1.70B	1.87B	2.02B	2.17B
Cash, Cash Equivalents and Short-Term Investments	432.00M	493.00M	420.00M	486.00M	569.00M	592.00M
Total Debt	96.00M	561.00M	576.00M	640.00M	637.00M	572.00M
Total Liabilities	990.00M	1.55B	1.57B	1.74B	1.76B	1.71B
Stockholders Equity	613.00M	230.00M	133.00M	135.00M	258.00M	460.00M
Cash Flow
Free Cash Flow	731.00M	286.00M	277.00M	355.00M	403.00M	432.00M
Operating Cash Flow	758.00M	305.00M	303.00M	375.00M	419.00M	463.00M
Investing Cash Flow	-28.00M	-21.00M	-32.00M	-49.00M	-18.00M	-31.00M
Financing Cash Flow	-699.00M	-233.00M	-306.00M	-383.00M	-381.00M	-356.00M

Teradata Technical Analysis

Technical Analysis SentimentPositive

Last Price34.18

Price Trends

50DMA30.93Positive

100DMA30.58Positive

200DMA30.07Positive

Market Momentum

MACD0.64Positive

RSI59.84Neutral

STOCH56.71Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TDC, the sentiment is Positive. The current price of 34.18 is above the 20-day moving average (MA) of 33.41, above the 50-day MA of 30.93, and above the 200-day MA of 30.07, indicating a bullish trend. The MACD of 0.64 indicates Positive momentum. The RSI at 59.84 is Neutral, neither overbought nor oversold. The STOCH value of 56.71 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TDC.

Teradata Risk Analysis

Teradata disclosed 26 risk factors in its most recent earnings report. Teradata reported the most risks in the "Tech & Innovation" category.

Tech & Innovation - Risks related to the company’s reliance on technology and ability to make innovative products

Latest Risks Added

3 New Risks

1.Our cloud and service offerings are designed to offer AI/ML capabilities, which exposes us to an uncertain regulatory environment and rapidly changing technology where any inability to comply with any such regulations may result in reputational harm, liability and disruption to our business operations.Q4, 2023

2.Challenges with the design and implementation of our new enterprise resource planning ("ERP") system could adversely impact our business and operations.Q4, 2023

3.The transition to cloud-based software-as-a-service (SaaS) and cloud solutions has increased our exposure to information security risks related to the protection of sensitive information processed through these solutions and any unauthorized access to or use of such systems could adversely impact our results of operation, reputation, and relationships with our customers.Q4, 2023

Teradata Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

TDC against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MSFT	80Outperform	$3.87T	27.18	33.21%	0.70%	17.91%	36.06%
ORCL	79Outperform	$388.19B	19.49	42.58%	1.57%	21.62%	45.95%
PLTR	75Outperform	$415.40B	111.87	39.84%	―	87.06%	230.03%
TDC	74Outperform	$3.04B	6.95	91.52%	―	1.39%	294.07%
MDB	66Neutral	$27.24B	462.10	2.00%	―	25.45%	―
PRGS	64Neutral	$1.81B	19.89	18.36%	―	6.36%	95.43%
Sector *	61Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

* Technology Sector Average

Performance Comparison

TDC and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
TDC	Teradata Corp	34.18	6.94	25.48%
MSFT	Microsoft	523.00	16.98	3.36%
ORCL	Oracle Corporation	127.11	-92.80	-42.20%
PRGS	Progress Software	43.44	1.42	3.38%
MDB	Mongodb, Inc.	339.78	-12.83	-3.64%
PLTR	Palantir Technologies Inc.	171.58	-2.43	-1.40%

Teradata Corporate Events

Business Operations and StrategyRegulatory Filings and Compliance

Teradata Enhances Governance With New Indemnification Agreement

Positive

Aug 17, 2026

On August 12, 2026, Teradata Corporation’s board approved a new indemnification agreement and executed it with all directors and executive officers, formalizing protection for individuals serving in these leadership roles. The agreement commits Terad...

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.

Date of analysis: Nov 06, 2026

Teradata AI Stock Analysis