Morningstar

Teradyne Inc TER

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Stock XNAS Rating as of
$341.11 −18.49 (5.14%)
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Teradyne’s Wide-Moat Chip Testing Portfolio Is Gaining Share in AI Compute

William Kerwin

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 impressively strong relationships with Apple and Taiwan Semiconductor. Teradyne’s market leadership exhibits itself in terrific margins, strong returns on invested capital, and a high market share. We give the firm a wide economic moat rating.

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Price vs Fair Value

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TER is trading at a LOCK|DB?% premium.
Price
$341.11
Fair Value
LOCK|Gq
Uncertainty
LOCK|QL
1-Star Price
LOCK|N.Nd
5-Star Price
<^w
Economic Moat
LOCK|Ht
Capital Allocation
LOCK|P%B#fM

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, particularly with Advantest holding a superior position in GPU testing.

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Trading Information

Previous Close Price
$359.60
Day Range
$334.35–348.59
52-Week Range
$88.60–487.91
Bid/Ask
$337.00 / $340.93
Shares Outstanding
156.54M
Market Cap
$53.40B
Volume/Avg
3M / 4M

Key Statistics

Price/Earnings (Normalized)
62.21
Price/Sales
15.06
Dividend Yield (Trailing)
0.15%
Dividend Yield (Forward)
0.15%
Total Yield
1.18%

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 and sells collaborative and autonomous robots for factory applications. Teradyne serves numerous end markets and geographies, directly and indirectly, through 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 Growth
Total Number of Employees
6,600
Website
https://www.teradyne.com

Competitors

Valuation

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Metric
TER
KLAC
6857
Price/Earnings (Normalized)
 62.2163.5357.50
Price/Book Value
 17.9151.9027.20
Price/Sales
 15.0623.3819.33
Price/Cash Flow
 54.6058.1652.61
Price/Earnings
TER
KLAC
6857

Financial Strength

Metric
TER
KLAC
6857
Quick Ratio
 1.341.981.72
Current Ratio
 2.153.032.53
Interest Coverage
 108.2519.31181.23
Quick Ratio
TER
KLAC
6857

Profitability

Metric
TER
KLAC
6857
Return on Assets (Normalized)
 22.78%29.68%37.89%
Return on Equity (Normalized)
 31.96%96.44%59.38%
Return on Invested Capital (Normalized)
 30.60%44.22%51.83%
Return on Assets
TER
KLAC
6857

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