Skip to Content

Teradyne Inc TER

Morningstar Rating
$100.35 +0.08 (0.08%)
View Full Chart
Unlock our analysis with Morningstar Investor

Company Report

Teradyne Earnings: We Push Out Our Recovery Thesis and Lower Our Valuation

We lower our fair value estimate for wide-moat Teradyne to $135 per share, from $147, as we push out our forecast for a demand recovery. Teradyne’s results met our expectations but first-quarter guidance and 2024 commentary was significantly weaker than our model. We continue to believe that Teradyne’s current demand is well below healthy levels and will normalize eventually, but we're no longer confident this will occur in the short term. We now only expect modest growth in 2024. Our wide moat rating is intact, and we believe that when demand does return, particularly for mobile phone chip testing, Teradyne is well positioned to capitalize on it with a robust portfolio. Even as we temper our bullishness on the name and lower our short-term expectations, we see shares as undervalued against the firm’s strong competitive position and long-term opportunity. We just no longer see significant catalysts to the stock in 2024.

Price vs Fair Value

TER is trading at a 26% discount.
Price
$100.36
Fair Value
$977.00
Uncertainty
High
1-Star Price
$478.87
5-Star Price
$77.00
Economic Moat
Ymdy
Capital Allocation
Jbljwyhr

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.

Is it the right time to buy, sell, or hold?
Start a free trial of Morningstar Investor to unlock exclusive ratings and continuous analyst coverage to help you decide if TER is a good fit for your portfolio.

News

Trading Information

Previous Close Price
$100.27
Day Range
$98.76100.69
52-Week Range
$81.08119.20
Bid/Ask
$98.00 / $100.20
Market Cap
$15.36 Bil
Volume/Avg
1.2 Mil / 1.7 Mil

Key Statistics

Price/Earnings (Normalized)
34.25
Price/Sales
6.16
Dividend Yield (Trailing)
0.45%
Dividend Yield (Forward)
0.48%
Total Yield
3.03%

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)
34.2518.4824.54
Price/Book Value
6.075.589.43
Price/Sales
6.165.126.28
Price/Cash Flow
27.9818.6720.98
Price/Earnings
TER
KEYS
AMAT

Financial Strength

Metric
TER
KEYS
AMAT
Quick Ratio
1.881.651.77
Current Ratio
3.282.352.71
Interest Coverage
131.9017.0924.60
Quick Ratio
TER
KEYS
AMAT

Profitability

Metric
TER
KEYS
AMAT
Return on Assets (Normalized)
13.98%17.40%22.91%
Return on Equity (Normalized)
19.47%32.60%44.88%
Return on Invested Capital (Normalized)
17.84%22.31%30.44%
Return on Assets
TER
KEYS
AMAT
See how this stock stacks up to its competitors with Morningstar Investor

Semiconductor Equipment & Materials Industry Comparables

Ticker
Name
Morningstar Rating for Stocks
Economic Moat
Market Cap
ASMLF
ASML Holding NVPkn$376.4 Bil
ASML
ASML Holding NV ADRZdkx$376.4 Bil
AMAT
Applied Materials IncYtv$164.4 Bil
LRCX
Lam Research CorpYphx$121.0 Bil
TOELF
Tokyo Electron LtdWpqr$112.2 Bil
TOELY
Tokyo Electron Ltd ADRGmb$111.5 Bil
KLAC
KLA CorpQqhbt$91.0 Bil
DSCSY
Disco Corp ADRYgt$34.0 Bil
ADTTF
Advantest CorpCth$33.9 Bil

Sponsor Center