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Teradyne Inc TER

Morningstar Rating
$112.83 +1.29 (1.16%)
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Company Report

Teradyne Holds a Wide Moat in Chip Testing and Is Dealing With Cyclically Soft Demand

Teradyne is a heavyweight supplier of automated test equipment for semiconductors, boasting market-leading capabilities that run the gamut of chips. It is one of two companies worldwide that can produce testers for the most cutting-edge semiconductors, thanks to robust engineering talent across hardware and software and a structural lead in organic investment. The firm is a vital partner to chipmakers across the industry and has an impressively strong relationship with Apple and Taiwan Semiconductor. Teradyne’s market leadership exhibits itself in industry-leading margins, strong returns on invested capital, and a top market share. We give the firm a wide economic moat rating.

Price vs Fair Value

TER is trading at a 19% discount.
Price
$108.90
Fair Value
$392.00
Uncertainty
High
1-Star Price
$845.85
5-Star Price
$78.00
Economic Moat
Pfbk
Capital Allocation
Bmwdqsw

Bulls Say, Bears Say

Bulls

We think Teradyne’s depth, breadth, and steep investment in chip testing capabilities form structural competitive advantages that would be extremely difficult to replicate.

Bears

We expect continued head-to-head competition with Advantest to be a headwind to Teradyne’s growth and profitability.

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News

Trading Information

Previous Close Price
$111.54
Day Range
$111.57113.28
52-Week Range
$81.08119.20
Bid/Ask
$112.11 / $114.39
Market Cap
$17.27 Bil
Volume/Avg
2.0 Mil / 1.7 Mil

Key Statistics

Price/Earnings (Normalized)
38.51
Price/Sales
6.93
Dividend Yield (Trailing)
0.40%
Dividend Yield (Forward)
0.43%
Total Yield
2.70%

Company Profile

Teradyne provides testing equipment, including automated test equipment for semiconductors, system testing for hard disk drives, circuit boards, and electronics systems and wireless testing for devices. The firm entered the industrial automation market in 2015, into which it sells collaborative and autonomous robots for factory applications. Teradyne serves numerous end markets and geographies directly and indirectly with its products, but its most significant exposure is to semiconductor testing. Teradyne serves vertically integrated, fabless, and foundry chipmakers with its equipment.
Sector
Technology
Industry
Semiconductor Equipment & Materials
Stock Style Box
Mid Core
Total Number of Employees
6,500

Competitors

Valuation

Metric
TER
KEYS
AMAT
Price/Earnings (Normalized)
38.5118.8025.62
Price/Book Value
6.825.679.83
Price/Sales
6.935.216.56
Price/Cash Flow
31.4518.9921.91
Price/Earnings
TER
KEYS
AMAT

Financial Strength

Metric
TER
KEYS
AMAT
Quick Ratio
1.881.211.77
Current Ratio
3.281.932.71
Interest Coverage
131.9015.5424.60
Quick Ratio
TER
KEYS
AMAT

Profitability

Metric
TER
KEYS
AMAT
Return on Assets (Normalized)
13.98%16.13%22.91%
Return on Equity (Normalized)
19.47%30.05%44.88%
Return on Invested Capital (Normalized)
17.84%20.67%30.44%
Return on Assets
TER
KEYS
AMAT
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