Now trading at a price of $121.45, Teradyne has moved -3.7% so far today.
Teradyne returned gains of 22.8% last year, with its stock price reaching a high of $163.21 and a low of $81.08. Over the same period, the stock outperformed the S&P 500 index by 2.3%. More recently, the company's 50-day average price was $136.73. 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 6,200 full time employees. Teradyne has offered a 0.4% 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 | $121.45 |
| P/E Ratio | 16.02 | 17.91 | 16.65 | 20.8 | 25.15 | 41.74 |
| 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 45.0, compared to an average of 25.19 for the Industrials sector. Based on its EPS guidance of $4.68, the company has a forward P/E ratio of 29.2. The 10.3% compound average growth rate of Teradyne's historical and projected earnings per share yields a PEG ratio of 4.35. 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 7.2 is higher than the sector average of 3.17. The company's shares are currently trading 295.2% 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.
Analysts Give Teradyne an Average Rating of Buy:
The 17 analysts following Teradyne have set target prices ranging from $110.0 to $180.0 per share, for an average of $142.42 with a buy rating. The company is trading -14.7% away from its average target price, indicating that there is an analyst consensus of some upside potential.
Teradyne has an average amount of shares sold short because 2.6% of the company's shares are sold short. Institutions own 102.3% of the company's shares, and the insider ownership rate stands at 0.42%, suggesting a small amount of insider investors. The largest shareholder is Vanguard Group Inc, whose 11% stake in the company is worth $2,327,202,251.
