Teradata: Buy Rating Reiterated as Improving Fundamentals Drive Margin Expansion; $40 Price Target Maintained

Analyst Erik Woodring from Morgan Stanley maintained a Buy rating on Teradata and keeping the price target at $40.00.

Erik Woodring has given his Buy rating due to a combination of factors that underscore Teradata’s improving fundamentals and earnings power. He highlights that the company delivered a solid first quarter, with revenue rising for a second straight period and profitability outpacing expectations, supported by stronger recurring revenue and higher-margin business mix, which pushed non-GAAP operating margins meaningfully higher year over year.

He also notes that recurring revenue growth accelerated on the back of Teradata’s hybrid platform and on-premise term licenses, while free cash flow excluding SAP proceeds was materially better than anticipated, reflecting strong collections. Although management kept full-year 2026 guidance and the $40 price target unchanged and issued a cautious near-term outlook, Woodring interprets this as conservatism rather than a deterioration in demand, and he believes Teradata remains well positioned to benefit from early AI-related spending and internal efficiency gains that should continue to expand margins.

In another report released on April 30, Citi also maintained a Buy rating on the stock with a $38.00 price target.