Teradyne (TER) AI Stock Analysis

• Market Cap: $22.14B
• Dividend Yield: 0.33%
• Average Volume (3M): 3.70M
• Price to Earnings (P/E): 47.9
• Beta (1Y): 1.77
• Revenue Growth: 4.83%
• EPS Growth: -9.47%
• Country: US
• Employees: 6,500
• Sector: Technology
• Sector Strength: 88
• Industry: Semiconductors
• EPS (TTM): 0.57
• Shares Outstanding: 159,073,530
• 10 Day Avg. Volume: 2,890,309
• 30 Day Avg. Volume: 3,701,997
• PEG Ratio: 2.15
• Price to Book (P/B): 7.11
• Price to Sales (P/S): 7.10
• P/FCF Ratio: 42.25
• Enterprise Value/Market Cap: 0.64
• Enterprise Value/Revenue: 5.01
• Enterprise Value/Gross Profit: 8.48
• Enterprise Value/Ebitda: 21.53
• 1Y Price Target: $138.46
• Price Target Upside: -0.27% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 14

• Rating: 77 Outperform
• Price Target: $162.00 ▲(16.68% Upside)

Teradyne's strong financial performance and positive earnings call outlook are the primary drivers of its stock score. The technical analysis supports a bullish trend, although the high P/E ratio suggests caution regarding valuation. The company's strategic focus on AI and robotics positions it well for future growth, despite some challenges in specific segments.

Positive Factors

Strong Financial Health

Teradyne's strong financial health, characterized by low leverage and efficient cash flow management, provides a solid foundation for sustainable growth and resilience against economic fluctuations.

AI Compute Demand

The increasing demand for AI compute, particularly in the SOC business, positions Teradyne to capitalize on emerging technology trends, driving future revenue growth and market expansion.

Revenue and EPS Performance

Exceeding revenue and EPS guidance demonstrates Teradyne's effective execution and market positioning, reinforcing investor confidence and supporting long-term financial stability.

Negative Factors

Robotics Segment Challenges

The underperformance and expected continued losses in the Robotics segment highlight operational challenges that could hinder overall profitability and require strategic adjustments.

Weak Mobile Segment Outlook

A modest outlook for the mobile segment suggests potential revenue stagnation, impacting growth prospects and necessitating diversification into other high-demand areas.

Tax Rate Increase

An increased tax rate due to new legislation could reduce net income, affecting cash flow and investment capacity, thus posing a challenge to maintaining profitability levels.

Teradyne Business Overview & Revenue Model

Company Description

Teradyne, Inc. designs, develops, manufactures, sells, and supports automatic test equipment worldwide. The company operates through Semiconductor Test, System Test, Industrial Automation, and Wireless Test segments. The Semiconductor Test segment offers products and services for wafer level and device package testing in automotive, industrial, communications, consumer, smartphones, cloud computer and electronic game, and other applications. This segment also provides FLEX test platform systems; J750 test system to address the volume semiconductor devices; Magnum platform that tests memory devices, such as flash memory and DRAM; and ETS platform for semiconductor manufacturers, and assembly and test subcontractors in the analog/mixed signal markets. It serves integrated device manufacturers that integrate the fabrication of silicon wafers into their business; fabless companies that outsource the manufacturing of silicon wafers; foundries; and semiconductor assembly and test providers. The System Test segment offers defense/aerospace test instrumentation and systems; storage test systems; and circuit-board test and inspection systems. The Industrial Automation segment provides collaborative robotic arms, autonomous mobile robots, and advanced robotic control software for manufacturing, logistics, and light industrial customers. The Wireless Test segment provides test solutions for use in the development and manufacture of wireless devices and modules, smartphones, tablets, notebooks, laptops, peripherals, and Internet-of-Things devices under the LitePoint brand name. This segment also offers IQxel products for Wi-Fi and other standards; IQxstream solution for testing GSM, EDGE, CDMA2000, TD-SCDMA, WCDMA, HSPA+, LTE, and 5G technologies; IQcell, a multi-device cellular signaling test solution; IQgig test solution; and turnkey test software for wireless chipsets. Teradyne, Inc. was incorporated in 1960 and is headquartered in North Reading, Massachusetts.

How the Company Makes Money

Teradyne generates revenue primarily through the sale of its test systems, which include semiconductor test equipment, system test solutions, and wireless test products. The company earns significant income from the semiconductor industry, where it provides testing solutions for chips used in a wide range of electronic devices. Additionally, Teradyne has a growing industrial automation segment that contributes to its revenue through the sale of collaborative robots (cobots) and associated software. The company benefits from long-term relationships with major technology firms, which often rely on Teradyne's products for their manufacturing processes. Furthermore, maintenance and support services for its equipment also represent a recurring revenue stream, enhancing the overall financial stability of the company.

Teradyne Financial Statement Overview

Summary

Teradyne exhibits strong financial health with robust profitability, efficient cash flow management, and a solid balance sheet with low leverage. However, attention to revenue growth and return on equity could enhance financial performance further.

Income Statement

Teradyne shows strong profitability with a robust gross profit margin of approximately 59% in TTM (Trailing-Twelve-Months) and consistent net income growth over the years. The EBIT and EBITDA margins remain healthy, indicating operational efficiency. Despite a slight revenue decline in the past annual period, recent TTM data suggests recovery and potential for growth.

Balance Sheet

The company's balance sheet is strong with a very low debt-to-equity ratio, reflecting minimal leverage and lower financial risk. The equity ratio is highly favorable, suggesting a solid financial foundation. However, the return on equity has shown some fluctuations, which could be an area for improvement.

Cash Flow

Teradyne demonstrates impressive cash flow management with a positive free cash flow trend and a strong operating cash flow to net income ratio. The company effectively converts income into cash, supporting ongoing operations and investments. The free cash flow growth rate is commendable, indicating effective capital expenditure management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.83B	2.82B	2.68B	3.16B	3.70B	3.12B
Gross Profit	1.67B	1.65B	1.54B	1.87B	2.21B	1.79B
EBITDA	658.47M	732.41M	640.26M	954.78M	1.30B	1.05B
Net Income	469.17M	542.37M	448.75M	715.50M	1.01B	784.15M
Balance Sheet
Total Assets	3.76B	3.71B	3.49B	3.50B	3.81B	3.65B
Cash, Cash Equivalents and Short-Term Investments	367.89M	599.67M	819.73M	894.38M	1.37B	1.44B
Total Debt	74.46M	76.62M	82.61M	132.88M	184.58M	472.76M
Total Liabilities	924.56M	889.42M	960.93M	1.05B	1.25B	1.44B
Stockholders Equity	2.84B	2.82B	2.53B	2.45B	2.56B	2.21B
Cash Flow
Free Cash Flow	568.90M	474.08M	425.59M	414.67M	965.89M	683.96M
Operating Cash Flow	792.55M	672.18M	585.23M	577.92M	1.10B	868.93M
Investing Cash Flow	-357.49M	-622.34M	-179.65M	43.75M	120.36M	-569.79M
Financing Cash Flow	-506.11M	-251.77M	-501.91M	-892.99M	-1.01B	-158.29M

Teradyne Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 138.84
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TER, the sentiment is Positive. The current price of 138.84 is below the 20-day moving average (MA) of 139.86, above the 50-day MA of 126.36, and above the 200-day MA of 103.12, indicating a neutral trend. The MACD of 4.04 indicates Positive momentum. The RSI at 54.40 is Neutral, neither overbought nor oversold. The STOCH value of 53.56 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TER.

Teradyne Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TER	77 Outperform	$22.14B	47.92	16.85%	0.33%	4.83%	-9.47%
AMKR	76 Outperform	$7.95B	26.23	7.37%	2.39%	-1.20%	-19.46%
ON	75 Outperform	$22.45B	51.39	5.72%	―	-17.93%	-75.83%
ASX	73 Outperform	$27.55B	25.84	10.97%	2.81%	4.86%	6.44%
STM	72 Outperform	$26.98B	42.64	3.72%	1.13%	-22.97%	-78.58%
ENTG	69 Neutral	$14.04B	47.60	8.08%	0.43%	-1.86%	59.60%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

Teradyne Corporate Events

Teradyne Robotics President Ujjwal Kumar Steps Down

On August 29, 2025, Ujjwal Kumar’s tenure as President of Teradyne Robotics ended. He will remain with the company until September 30, 2025, to transition his responsibilities. A separation agreement was made, granting him a cash severance of $1,130,000, paid in two installments, and a pro-rated annual bonus for 2025. The agreement includes restrictive covenants such as non-compete, non-solicitation, and non-disparagement clauses.

The most recent analyst rating on (TER) stock is a Buy with a $130.00 price target. To see the full list of analyst forecasts on Teradyne stock, see the TER Stock Forecast page.

Teradyne’s Earnings Call Highlights AI Compute Strength

The latest earnings call from Teradyne conveyed a generally positive sentiment, driven by robust demand in AI compute and financial performance that surpassed expectations. Despite facing challenges in the robotics and memory segments and uncertainty in the mobile market, the positive developments in AI compute and strategic acquisitions were highlighted as significant strengths, indicating an overall optimistic outlook.