TER Investors, You Need to Know These Facts Today.

Teradyne logged a 4.3% change during today's afternoon session, and is now trading at a price of $151.0 per share.

Teradyne returned gains of 33.2% last year, with its stock price reaching a high of $152.23 and a low of $81.08. Over the same period, the stock outperformed the S&P 500 index by 8.5%. More recently, the company's 50-day average price was $125.45. Teradyne, Inc. designs, develops, manufactures, and sells automated test systems and robotics products worldwide. Based in North Reading, MA, the Large-Cap Industrials company has 6,600 full time employees. Teradyne has offered a 0.3% dividend yield over the last 12 months.

EPS Trend Sustained Primarily by Reducing the Number of Shares Outstanding:

2018 2019 2020 2021 2022 2023
Revenue (M) $2,101 $2,295 $3,121 $3,703 $3,155 $2,676
Gross Margins 57% 57% 56% 60% 59% 56%
Net Margins 22% 20% 25% 27% 23% 17%
Net Income (M) $452 $467 $784 $1,015 $716 $449
Net Interest Expense (M) $22 $22 $24 $18 $4 $4
Depreciation & Amort. (M) $67 $71 $80 $91 $91 $92
Diluted Shares (M) 193 179 183 184 170 164
Earnings Per Share $2.35 $2.6 $4.28 $5.53 $4.22 $2.73
EPS Growth n/a 10.64% 64.62% 29.21% -23.69% -35.31%
Avg. Price $38.6 $49.08 $78.61 $127.94 $113.66 $151.17
P/E Ratio 16.02 17.91 16.65 20.8 25.15 51.95
Free Cash Flow (M) $363 $444 $684 $966 $415 $426
CAPEX (M) $114 $135 $185 $132 $163 $160
Current Ratio 3.64 3.08 3.45 3.2 3.03 3.28

Teradyne has growing revenues and increasing reinvestment in the business and an excellent current ratio of 3.28. Additionally, the company's financial statements display wider gross margins than its peer group and generally positive cash flows. However, the firm has EPS growth achieved by reducing the number of outstanding shares.

Teradyne's Valuation Is in Line With Its Sector Averages:

Teradyne has a trailing twelve month P/E ratio of 47.7, compared to an average of 25.4 for the Industrials sector. Based on its EPS guidance of $4.83, the company has a forward P/E ratio of 26.0. The 10.8% compound average growth rate of Teradyne's historical and projected earnings per share yields a PEG ratio of 4.4. This suggests that these shares are overvalued. Furthermore, Teradyne is likely overvalued compared to the book value of its equity, since its P/B ratio of 9.08 is higher than the sector average of 3.23. The company's shares are currently trading 391.4% below their Graham number. Ultimately, Teradyne's strong cash flows, decent earnings multiple, and healthy debt levels factor towards it being fairly valued, its elevated P/B ratio notwithstanding.

Teradyne Has an Average Rating of Buy:

The 17 analysts following Teradyne have set target prices ranging from $100.0 to $161.0 per share, for an average of $129.66 with a buy rating. The company is trading 16.5% away from its average target price, indicating that there is an analyst belief that shares are overpriced.

Teradyne has an average amount of shares sold short because 3.2% of the company's shares are sold short. Institutions own 81.3% of the company's shares, and the insider ownership rate stands at 0.33%, suggesting a small amount of insider investors. The largest shareholder is Vanguard Group Inc, whose 11% stake in the company is worth $2,781,506,890.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.