Teradyne (TER) AI Stock Analysis

• Market Cap: $12.35B
• Dividend Yield: 0.62%
• Average Volume (3M): 2.92M
• Price to Earnings (P/E): 21.8
• Beta (1Y): 1.88
• Revenue Growth: 9.61%
• EPS Growth: 28.34%
• Country: US
• Employees: 6,500
• Sector: Technology
• Sector Strength: 76
• Industry: Semiconductors
• EPS (TTM): 0.75
• Shares Outstanding: 160,420,290
• 10 Day Avg. Volume: 2,457,300
• 30 Day Avg. Volume: 2,921,652
• PEG Ratio: 3.79
• Price to Book (P/B): 3.31
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 20.06
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $103.50
• Price Target Upside: 34.45% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 17

• Rating: 73 Outperform
• Price Target: ―

Teradyne's overall stock score reflects strong financial health and strategic wins, but is tempered by bearish technical indicators and concerns over future visibility due to trade uncertainties. The stock's moderate valuation and the mixed signals from the earnings call contribute to a cautious outlook.

Positive Factors

AI Demand

Teradyne is well positioned to benefit from strong long-term secular AI compute and memory demand trends.

Industrial Automation

The industrial automation business is expected to be a significant revenue driver for Teradyne in the next decade.

Technological Advancements

The increased complexity of testing, driven by technological advancements like 5G, allows Teradyne to raise the average selling price of its products, boosting long-term profitability.

Negative Factors

Inventory Concerns

There are considerable inventories at both customers and internally that must be utilized throughout the second half.

Market Challenges

The company faces challenges from order pushouts and vulnerabilities in the automotive and industrial markets due to trade tariffs.

Product Life Cycles

Longer product life cycles can lead to less frequent upgrades and delays in demand, impacting revenue growth.

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 makes money primarily through the sale of its automated test equipment and industrial automation solutions. The semiconductor test sector is a significant revenue stream, where the company provides high-performance systems to test semiconductors, ensuring they meet quality and reliability standards before reaching the market. Teradyne's industrial automation segment, which includes robotics and collaborative robots, caters to a wide range of industries seeking to automate manufacturing processes for improved efficiency and productivity. The company also generates revenue through service contracts, support, and maintenance for its equipment, which are crucial for customer satisfaction and retention. Strategic partnerships with key players in technology and manufacturing further bolster its revenue growth and market position.

Teradyne Financial Statement Overview

Summary

Teradyne's financial health is commendable, marked by strong profitability, efficient operations, and solid cash generation. The company has managed to maintain healthy margins and a low leverage, but there are fluctuations in revenue growth and return on equity that warrant attention.

Income Statement

Teradyne has shown a strong revenue growth trajectory, especially in the TTM period. The company's gross and net profit margins are healthy, reflecting efficient cost management and profitability. The EBIT and EBITDA margins further underline operational efficiency. Revenue growth, however, has fluctuated in past years, indicating potential market or operational challenges.

Balance Sheet

The balance sheet exhibits a solid equity base with a low debt-to-equity ratio, highlighting financial stability. The equity ratio is strong, indicating sound capitalization. However, the return on equity has shown some variability, suggesting potential fluctuations in profitability or asset utilization efficiency.

Cash Flow

Teradyne demonstrates robust operating cash flow relative to net income, indicating strong cash generation from operations. Free cash flow growth has been positive, supporting potential for investment and shareholder returns. The free cash flow to net income ratio is healthy, though some periods have shown variability in cash flow trends.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
2.91B	2.82B	2.68B	3.16B	3.70B	3.12B
	Gross Profit
1.72B	1.65B	1.54B	1.87B	2.21B	1.79B
	EBIT
581.35M	593.79M	501.07M	831.94M	1.21B	928.41M
	EBITDA
715.65M	593.79M	640.50M	954.20M	1.29B	1.04B
	Net Income Common Stockholders
577.07M	542.37M	448.75M	715.50M	1.01B	784.15M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
507.78M	599.67M	819.73M	894.38M	1.37B	1.44B
	Total Assets
3.71B	3.71B	3.49B	3.50B	3.81B	3.65B
	Total Debt
68.76M	76.62M	82.61M	132.88M	184.58M	472.76M
	Net Debt
-406.87M	-476.73M	-674.96M	-721.89M	-937.62M	-441.36M
	Total Liabilities
908.34M	889.42M	960.93M	1.05B	1.24B	1.45B
	Stockholders Equity
3.71B	3.71B	2.53B	2.45B	2.57B	2.21B
Cash Flow		Free Cash Flow
608.44M	474.08M	425.59M	414.67M	965.89M	683.96M
	Operating Cash Flow
826.53M	672.18M	585.23M	577.92M	1.10B	868.93M
	Investing Cash Flow
-660.10M	-622.34M	-179.65M	43.75M	120.36M	-569.79M
	Financing Cash Flow
-391.91M	-251.77M	-501.91M	-892.99M	-1.01B	-158.29M

Teradyne Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 76.98
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TER, the sentiment is Negative. The current price of 76.98 is below the 20-day moving average (MA) of 78.38, below the 50-day MA of 78.98, and below the 200-day MA of 110.25, indicating a bearish trend. The MACD of 0.24 indicates Negative momentum. The RSI at 44.57 is Neutral, neither overbought nor oversold. The STOCH value of 12.37 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TER.

Teradyne Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TER	73 Outperform	$12.35B	21.79	21.55%	0.62%	9.61%	28.34%
SWKS	71 Outperform	$10.42B	27.10	6.70%	4.01%	-12.90%	-51.90%
ASX	70 Outperform	$20.66B	19.69	11.47%	2.38%	1.32%	4.86%
ON	69 Neutral	$17.25B	28.63	7.85%	―	-18.28%	-70.98%
ALAB	67 Neutral	$15.60B	403.32	4.47%	―	200.19%	―
ENTG	66 Neutral	$10.95B	35.40	8.65%	0.55%	-3.83%	-1.93%
Sector *	61 Neutral	$11.29B	10.07	-7.05%	2.96%	7.47%	-10.75%

Teradyne Corporate Events

Teradyne Shareholders Approve Updated Compensation Plan

On May 9, 2025, Teradyne, Inc. held its annual meeting of shareholders, where several key proposals were voted on. The shareholders approved an amended Equity and Cash Compensation Incentive Plan, which updates the previous 2006 Plan by incorporating compensation governance best practices and removing its term limit. Additionally, the election of directors, approval of executive compensation, and ratification of PricewaterhouseCoopers LLP as the independent auditor for 2025 were confirmed. However, a proposal requiring the company to report on political contributions was not approved.

The most recent analyst rating on (TER) stock is a Buy with a $185.00 price target. To see the full list of analyst forecasts on Teradyne stock, see the TER Stock Forecast page.