Teradata (TDC) AI Stock Analysis

• Market Cap: $2.51B
• Dividend Yield: N/A
• Average Volume (3M): 2.44M
• Price to Earnings (P/E): 22.1
• Beta (1Y): 0.79
• Revenue Growth: -8.18%
• EPS Growth: 46.26%
• Country: US
• Employees: 5,700
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): 0.74
• Shares Outstanding: 92,200,000
• 10 Day Avg. Volume: 2,057,765
• 30 Day Avg. Volume: 2,442,418
• PEG Ratio: 1.30
• Price to Book (P/B): 12.49
• Price to Sales (P/S): 1.73
• P/FCF Ratio: 10.05
• Enterprise Value/Market Cap: 1.02
• Enterprise Value/Revenue: 1.53
• Enterprise Value/Gross Profit: 2.58
• Enterprise Value/Ebitda: 8.86
• 1Y Price Target: $37.10
• Price Target Upside: 36.20% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 10
• EPS Forecast (FY): 2.62
• Revenue Forecast (FY): $1.64B

• Rating: 63 Neutral
• Price Target: $28.00 ▲(2.79% Upside)
• Action: Reiterated Date: 03/02/26
• Date: Action: Reiterated 03/02/26

The score is driven primarily by solid cash flow generation and improving margins, partially offset by leverage risk and uneven/declining revenue trends. Technicals support an uptrend, while guidance suggests measured improvement but with near-term variability. Valuation is mid-range, and corporate events add a positive balance-sheet catalyst via the SAP settlement.

Positive Factors

Strong free cash flow generation

Consistent, high free cash flow provides durable financial flexibility: it funds buybacks, R&D, and potential deleveraging without relying on external financing. Over 2–6 months this supports capital allocation choices and resilience through lumpy migration timing and seasonality.

Sustained margin expansion and operating leverage

Material operating‑margin improvement and higher gross margins reflect structural cost discipline and scalable cloud/service delivery. Higher margins increase cash conversion and reinvestment capacity, making earnings less sensitive to modest revenue variability over the medium term.

Cloud ARR growth and AI product momentum

Accelerating cloud ARR and expanded AI offerings increase addressable market and recurring revenue stickiness. Product innovation and partner distribution create sustainable demand channels and higher long‑term expansion potential as customers modernize analytics workloads.

Negative Factors

Elevated leverage and thin equity base

High leverage and a relatively small equity base increase financial risk and sensitivity to earnings misses; interest and refinancing obligations could constrain strategic spending. Even with settlement proceeds, leverage remains a structural vulnerability until materially reduced.

Uneven and declining top-line trends

Sustained revenue weakness undermines subscription growth and services demand, limiting long‑term ARR compounding. Persistently uneven top line reduces visibility into capacity utilization and makes margin gains more dependent on cost cuts than organic expansion.

Cloud mix pressure and lumpy migration timing

A higher share of lower‑margin cloud revenue and unpredictable large migrations compress recurring margins and create volatility in ARR conversion. Seasonality and lumpy project timing can sustain quarter‑to‑quarter variability in growth and cash flow for several quarters.

Teradata Business Overview & Revenue Model

Company Description

Teradata Corporation, together with its subsidiaries, provides a connected multi-cloud data platform for enterprise analytics. The company offers Teradata Vantage, a data platform that allows companies to leverage their data across an enterprise, as well as connects various sources of data to drive ecosystem simplification and support customers on their journey to the cloud through an integrated migration. Its business consulting services include support services for organizations to establish a data and analytic vision, and identify and operationalize analytical opportunities, as well as enable a multi-cloud ecosystem architecture and ensure the analytical infrastructure delivers value. In addition, it offers support and maintenance services. The company serves clients in financial services, government, healthcare, manufacturing, retail, telecommunications, and travel/transportation sectors through a direct sales force in the Americas, Europe, the Middle East, Africa, the Asia Pacific, and Japan. Teradata Corporation was incorporated in 1979 and is headquartered in San Diego, California.

How the Company Makes Money

Teradata primarily makes money by selling subscriptions and related support for its analytics/data platform and by providing associated services. The company’s core revenue stream is recurring subscription revenue for access to its software capabilities delivered as cloud services and/or software subscriptions (including platform features, usage/consumption-based elements where applicable, and ongoing maintenance/support). A second key stream is professional services revenue, generated from implementation, migration (including moving workloads from on-premises to cloud), consulting, and training that help customers adopt and expand the platform. Historically, Teradata also generated revenue from perpetual software licenses and on-premises appliance/hardware-oriented deployments; where those arrangements still exist, they contribute via remaining license, maintenance, and support contracts, but the company has been shifting emphasis toward recurring subscription and cloud revenue. Significant factors influencing earnings include customers’ long-term analytics modernization and cloud migration initiatives, the scale/complexity of enterprise data warehouse workloads (which drives subscription size and services demand), and partnerships with major public cloud providers to run Teradata’s platform in customers’ preferred cloud environments.

Teradata Financial Statement Overview

Summary

Profitability and cash generation are solid (improving net margin and strong free cash flow with good earnings quality), but this is offset by uneven/declining revenue and elevated leverage with a thin equity base that increases financial risk.

Income Statement

TTM (Trailing-Twelve-Months) shows solid profitability with ~59% gross margin and ~11% EBIT margin, and net margin improving to ~7% versus ~6.5% in 2024 and ~3.4% in 2023. However, reported revenue is down versus 2024 ($1.66B vs. $1.75B), and recent years show uneven top-line momentum (declines in 2022 and 2024), which tempers the otherwise improving earnings profile.

Balance Sheet

Leverage is elevated: TTM debt-to-equity is ~2.6x, and the capital structure has been volatile with very high leverage in 2023–2024 (~4.7x and ~4.3x). Equity remains relatively thin (TTM ~$230M against ~$557M debt), increasing sensitivity to earnings swings. Positively, leverage improved from 2023–2024 levels, and returns on equity are strong, though partly amplified by the low equity base.

Cash Flow

Cash generation is a clear strength: TTM operating cash flow and free cash flow are both ~$305M, and free cash flow is close to net income (about 97%), indicating good earnings quality. Free cash flow rebounded strongly versus 2024 (TTM growth is high), though the multi-year pattern shows some variability (declines in 2022–2024). Operating cash flow relative to revenue is healthy for the period, supporting reinvestment and financial flexibility.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.66B	1.75B	1.83B	1.79B	1.92B
Gross Profit	993.00M	1.06B	1.11B	1.08B	1.19B
EBITDA	268.00M	293.00M	263.00M	225.00M	367.00M
Net Income	130.00M	114.00M	62.00M	33.00M	147.00M
Balance Sheet
Total Assets	1.78B	1.70B	1.87B	2.02B	2.17B
Cash, Cash Equivalents and Short-Term Investments	493.00M	420.00M	486.00M	569.00M	592.00M
Total Debt	561.00M	576.00M	640.00M	637.00M	572.00M
Total Liabilities	1.55B	1.57B	1.74B	1.76B	1.71B
Stockholders Equity	230.00M	133.00M	135.00M	258.00M	460.00M
Cash Flow
Free Cash Flow	286.00M	277.00M	355.00M	403.00M	432.00M
Operating Cash Flow	305.00M	303.00M	375.00M	419.00M	463.00M
Investing Cash Flow	-21.00M	-32.00M	-49.00M	-18.00M	-31.00M
Financing Cash Flow	-233.00M	-306.00M	-383.00M	-381.00M	-356.00M

Teradata Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 27.24
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TDC, the sentiment is Neutral. The current price of 27.24 is below the 20-day moving average (MA) of 29.22, below the 50-day MA of 29.79, and above the 200-day MA of 25.17, indicating a neutral trend. The MACD of -0.93 indicates Positive momentum. The RSI at 41.82 is Neutral, neither overbought nor oversold. The STOCH value of 19.79 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TDC.

Teradata Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TOST	72 Outperform	$16.72B	60.43	17.93%	―	25.76%	―
TDC	63 Neutral	$2.51B	22.10	66.41%	―	-8.18%	46.26%
AKAM	62 Neutral	$15.33B	28.07	9.64%	―	4.21%	-0.63%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
DBX	60 Neutral	$5.95B	14.67	-35.62%	―	-0.44%	2.47%
FOUR	58 Neutral	$4.60B	42.45	7.54%	―	23.16%	27.38%

Teradata Corporate Events

Teradata Expands Board and Appoints New Independent Director

On February 27, 2026, Teradata’s board approved the expansion of its board from nine to ten directors, effective March 1, 2026, and elected Melissa Fisher as a Class I director with a term expiring at the 2026 annual meeting. Fisher, deemed independent under Teradata’s governance guidelines and stock exchange rules, was also appointed to the Audit Committee and the Nominating and Governance Committee and designated as an Audit Committee Financial Expert.

These changes follow a previously announced cooperation agreement with Lynrock Lake and related stockholder parties, under which Fisher’s appointment was contemplated pending standard reviews. In connection with the agreement, long-serving director Daniel Fishback will retire at the end of his current term at the 2026 annual meeting and will not stand for re-election, with the company stating his decision is not due to any disagreement over operations, policies or practices.

The most recent analyst rating on (TDC) stock is a Hold with a $30.00 price target. To see the full list of analyst forecasts on Teradata stock, see the TDC Stock Forecast page.

Teradata Reaches Major Litigation Settlement with SAP SE

On February 19, 2026, Teradata entered into a settlement agreement with SAP SE and its U.S. affiliates to resolve all past and pending litigation between the parties, with mutual releases of all claims and liabilities tied to the disputes. Under the deal, Teradata is entitled to receive a gross payment of $480 million within 60 days of the effective date, after which both sides will ask the court to dismiss all claims, defenses and counterclaims with prejudice.

Teradata expects the net cash benefit from the settlement, after contingent fee arrangements and other legal costs but before taxes, to range between approximately $355 million and $362 million. The company is assessing how best to deploy these proceeds and has signaled that it will outline its plans on its first-quarter 2026 earnings call, a development that could materially affect its balance sheet flexibility and capital allocation options for shareholders.

The most recent analyst rating on (TDC) stock is a Buy with a $31.00 price target. To see the full list of analyst forecasts on Teradata stock, see the TDC Stock Forecast page.

Teradata enters cooperation agreement in governance-focused board refresh

On February 10, 2026, Teradata entered into a cooperation agreement with investor Lynrock Lake and related parties that will expand its board from nine to ten directors and is expected to add veteran finance and technology executive Melissa Fisher as a Class I director by March 1, 2026, subject to customary approvals. The deal, which includes a phased retirement of one Class I director after the 2026 annual meeting and one Class II director after the 2027 meeting, gives Lynrock Lake input into an additional independent director search and secures its support for Teradata’s 2026 director slate under voting, standstill and non‑disparagement commitments, underscoring an activist‑driven but collaborative board refresh aimed at bolstering governance and long‑term value for shareholders.

The cooperation agreement also provides Lynrock Lake with certain replacement rights for Fisher if it maintains a minimum ownership stake and caps Teradata’s reimbursement of the investor’s expenses at $100,000. By aligning with a significant shareholder while maintaining control over final board appointments and committee assignments, Teradata strengthens its governance framework and seeks to stabilize its shareholder base ahead of the 2026 proxy season, potentially reducing proxy conflict risk and signaling responsiveness to investor input on strategic oversight.

The most recent analyst rating on (TDC) stock is a Buy with a $49.00 price target. To see the full list of analyst forecasts on Teradata stock, see the TDC Stock Forecast page.