Teradata (TDC) AI Stock Analysis

• Market Cap: $2.11B
• Dividend Yield: N/A
• Average Volume (3M): 1.48M
• Price to Earnings (P/E): 19.1
• Beta (1Y): 0.87
• Revenue Growth: -4.53%
• EPS Growth: 93.29%
• Country: US
• Employees: 6,500
• Sector: Technology
• Sector Strength: 45
• Industry: Software
• EPS (TTM): 1.17
• Shares Outstanding: 94,600,000
• 10 Day Avg. Volume: 1,692,017
• 30 Day Avg. Volume: 1,478,398
• PEG Ratio: 0.20
• Price to Book (P/B): N/A
• Price to Sales (P/S): 1.21
• Price to Cash Flow (P/CF): 3.40
• P/FCF Ratio: 3.40
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $29.33
• Price Target Upside: 31.64% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 10

Teradata's overall score reflects a complex picture of strong financial management and strategic positioning in cloud and AI, yet tempered by technical weakness and recent revenue declines. The company's high leverage and declining revenue growth are key risks, though strategic initiatives and leadership changes hold promise for future improvement.

Positive Factors

Financial performance

Teradata exceeded third-quarter revenue and EPS expectations due to better revenue linearity and favorable foreign exchange comparisons.

Profitability

Profitability protection measures have helped drive EPS higher despite the challenges in cloud transformation.

Negative Factors

Cloud performance

The slowdown in cloud migrations and net expansion rate risks Teradata's 2026 $1 billion cloud ARR target.

Teradata Business Overview & Revenue Model

Company Description

Teradata Corp. engages in the provision of data platforms, consulting services, marketing, and analytic solutions. It operates through the Americas Region and International Region segments. The Americas Region segment consists of North America and Latin America. The International Region segment includes Europe, Middle East, Africa, Asia Pacific, and Japan. The company was founded on July 13, 1979 and is headquartered in San Diego, CA.

How the Company Makes Money

Teradata makes money primarily through the sale of its data analytics platforms and software, which include both on-premises and cloud-based solutions. The company offers its services in a subscription-based model, generating recurring revenue from cloud services and software licenses. Additionally, Teradata provides consulting and support services, which contribute to its revenue stream. Key partnerships with cloud providers, such as Amazon Web Services, Google Cloud, and Microsoft Azure, enhance its market reach and service offerings, driving additional revenue through integrated solutions and cross-platform capabilities.

Teradata Financial Statement Overview

Summary

Teradata exhibits strong profitability margins and efficient cash flow generation. Despite this, high leverage and declining revenue growth present risks. Improved net profitability over time is positive, but debt levels and revenue trajectory require close monitoring.

Income Statement

For the TTM (Trailing-Twelve-Months), Teradata exhibits a gross profit margin of 60.57% and a net profit margin of 6.51%. The revenue growth rate is -4.53% compared to the previous year, indicating a slight decline in revenue. EBIT and EBITDA margins stand at 12.06% and 16.11% respectively, reflecting moderate profitability. The company has shown improved net income over the years, indicating enhanced efficiency in operations.

Balance Sheet

The debt-to-equity ratio for TTM is high at 4.33, suggesting significant leverage, which poses potential risk. Return on Equity (ROE) is strong at 85.71%, driven by high net income relative to equity. The equity ratio is low at 7.81%, indicating a small portion of the company is funded by equity, which may concern investors about financial stability.

Cash Flow

Teradata's free cash flow is consistent, with a slight decrease from the previous year. The operating cash flow to net income ratio is robust at 2.66, and the free cash flow to net income ratio is 2.66, highlighting strong cash generation relative to net income. This indicates efficient cash management and the ability to sustain operations and investments.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
1.75B	1.83B	1.79B	1.92B	1.84B
	Gross Profit
1.06B	1.12B	1.08B	1.19B	1.02B
	EBIT
209.00M	186.00M	118.00M	231.00M	16.00M
	EBITDA
293.00M	262.00M	223.00M	231.00M	171.00M
	Net Income Common Stockholders
114.00M	62.00M	33.00M	147.00M	129.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
420.00M	486.00M	569.00M	592.00M	529.00M
	Total Assets
1.70B	1.87B	2.02B	2.17B	2.19B
	Total Debt
576.00M	640.00M	637.00M	572.00M	643.00M
	Net Debt
156.00M	154.00M	68.00M	-20.00M	114.00M
	Total Liabilities
1.57B	1.74B	1.76B	1.71B	1.79B
	Stockholders Equity
133.00M	135.00M	258.00M	460.00M	400.00M
Cash Flow		Free Cash Flow
303.00M	355.00M	403.00M	432.00M	216.00M
	Operating Cash Flow
303.00M	375.00M	419.00M	463.00M	267.00M
	Investing Cash Flow
-32.00M	-49.00M	-18.00M	-31.00M	-51.00M
	Financing Cash Flow
-306.00M	-383.00M	-381.00M	-356.00M	-186.00M

Teradata Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 22.28
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TDC, the sentiment is Negative. The current price of 22.28 is below the 20-day moving average (MA) of 24.13, below the 50-day MA of 28.51, and below the 200-day MA of 30.35, indicating a bearish trend. The MACD of -1.79 indicates Negative momentum. The RSI at 23.74 is Positive, neither overbought nor oversold. The STOCH value of 11.98 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TDC.

Teradata Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IBM	67 Neutral	$230.84B	39.97	24.14%	2.60%	1.45%	-20.56%
ORCL	67 Neutral	$403.27B	34.97	108.79%	1.07%	6.23%	12.37%
HPE	67 Neutral	$20.15B	7.46	12.09%	3.45%	10.93%	43.19%
TDC	65 Neutral	$2.11B	19.10	85.07%	―	-4.53%	93.29%
SNOW	62 Neutral	$48.72B	―	-31.43%	―	29.21%	-51.47%
MDB	60 Neutral	$14.57B	―	-6.70%	―	19.22%	28.46%
Sector *	58 Neutral	$21.35B	9.98	-18.95%	2.37%	5.03%	-22.66%

Teradata Corporate Events

Teradata Appoints Michael Hutchinson as COO

On February 21, 2025, Teradata Corporation announced the appointment of Michael Hutchinson as Chief Operating Officer, effective February 24, 2025. Previously serving as the Chief Customer Officer, Hutchinson will now oversee global operations, including IT, information security, and strategy, while continuing to lead Global Customer Services. This move is expected to enhance Teradata’s operational execution and align with its strategic vision of delivering Trusted AI at scale.

Teradata CFO Resigns as Company Seeks Replacement

Teradata announced the resignation of its Chief Financial Officer, Claire Bramley, effective March 31, 2025, as she moves to a CFO position in another industry. The company is searching for a permanent replacement, and Charles Smotherman, the current Chief Accounting Officer, has been appointed as the interim CFO starting March 24, 2025. Teradata reported its financial results for the fourth quarter and full year of 2024, highlighting a 15% increase in public cloud ARR to $609 million and a 90% increase in GAAP diluted EPS to $1.16. However, total ARR decreased by 6%, and total revenue declined by 5%. The company remains optimistic about its growth prospects in 2025, focusing on innovations in AI technology and cloud solutions.