Teradata (TDC) AI Stock Analysis

• Market Cap: $2.09B
• Dividend Yield: N/A
• Average Volume (3M): 1.07M
• Price to Earnings (P/E): 18.4
• Beta (1Y): 1.01
• Revenue Growth: -6.74%
• EPS Growth: 80.49%
• Country: US
• Employees: 5,700
• Sector: Technology
• Sector Strength: 94
• Industry: Software - Infrastructure
• EPS (TTM): 0.47
• Shares Outstanding: 94,500,000
• 10 Day Avg. Volume: 1,231,815
• 30 Day Avg. Volume: 1,072,159
• PEG Ratio: 0.29
• Price to Book (P/B): 22.58
• Price to Sales (P/S): 1.72
• P/FCF Ratio: 10.84
• Enterprise Value/Market Cap: 1.13
• Enterprise Value/Revenue: 1.41
• Enterprise Value/Gross Profit: 2.39
• Enterprise Value/Ebitda: 9.54
• 1Y Price Target: $23.17
• Price Target Upside: 11.39% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 6

• Rating: 57 Neutral
• Price Target: $21.50 ▲(3.37% Upside)

Teradata's overall score is driven by strong profitability and cash flow generation, but offset by declining revenue and high leverage. Technical indicators suggest bearish momentum, and valuation is moderate. The earnings call provides a mixed outlook with growth in ARR but challenges in revenue and margins.

Positive Factors

Cloud Segment Performance

Cloud ARR growth met expectations and broke a streak of underperformance, showing stability in the cloud segment.

Investment Thesis

Cloud ARR growth of 15% was 5 points above expectations and strengthened the investment thesis.

Product Capabilities

A top healthcare provider and several large international clients are using Teradata's advanced AI features, indicating strong product capabilities.

Negative Factors

Cloud Performance

This marked TDC's 4th straight quarter of Cloud underperformance, indicating a significant slowdown in Cloud momentum.

C-Suite Departure

Teradata's CFO recently departed the company, leaving open a key c-suite role.

Revenue Outlook

Management lowered the low-end of its full-year revenue outlook due to weaker Services and Consulting demand.

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 makes money primarily through the sale of software licenses, subscriptions, and related services. The company's revenue model includes a mix of recurring subscription revenues from its cloud-based offerings and one-time payments from software licenses. Teradata also generates income from consulting and professional services, helping clients implement and optimize their analytics solutions. Additionally, the company benefits from strategic partnerships with major cloud infrastructure providers, which help expand its reach and customer base. Key revenue streams include its flagship product, Teradata Vantage, a multi-cloud data platform that provides analytics capabilities across various environments.

Teradata Financial Statement Overview

Summary

Teradata demonstrates solid profitability and cash flow management with strong gross and EBITDA margins. However, challenges persist with a high debt-to-equity ratio and low equity ratio posing financial stability risks.

Income Statement

Teradata's TTM (Trailing-Twelve-Months) gross profit margin stands at approximately 60.05%, indicating strong profitability in converting revenue into gross profit. The net profit margin of 8.10% reflects moderate profitability, with room for improvement. While the revenue growth rate in recent periods has been slightly declining, the company maintains a stable EBIT margin of 13.38% and an EBITDA margin of 18.55%, showcasing operational efficiency.

Balance Sheet

The debt-to-equity ratio is relatively high at 3.72, indicating a higher reliance on debt financing which could be risky. The return on equity (ROE) is strong at 87.34%, suggesting effective use of equity. However, the equity ratio is low at 9.02%, pointing to a potential risk in financial stability due to the low proportion of equity in the asset base.

Cash Flow

Teradata's free cash flow growth is stable, with a strong operating cash flow to net income ratio of 2.06, indicating good cash generation relative to net income. The free cash flow to net income ratio is 2.04, reflecting efficient cash conversion. These metrics suggest strong cash flow management and the ability to generate sufficient cash to cover operational needs and investments.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.68B	1.75B	1.83B	1.79B	1.92B	1.84B
Gross Profit	987.00M	1.06B	1.12B	1.08B	1.19B	1.02B
EBITDA	247.00M	293.00M	262.00M	223.00M	231.00M	171.00M
Net Income	110.00M	114.00M	62.00M	33.00M	147.00M	129.00M
Balance Sheet
Total Assets	1.74B	1.70B	1.87B	2.02B	2.17B	2.19B
Cash, Cash Equivalents and Short-Term Investments	369.00M	420.00M	486.00M	569.00M	592.00M	529.00M
Total Debt	583.00M	576.00M	640.00M	637.00M	572.00M	643.00M
Total Liabilities	1.56B	1.57B	1.74B	1.76B	1.71B	1.79B
Stockholders Equity	176.00M	133.00M	135.00M	258.00M	460.00M	400.00M
Cash Flow
Free Cash Flow	285.00M	277.00M	355.00M	403.00M	432.00M	216.00M
Operating Cash Flow	284.00M	303.00M	375.00M	419.00M	463.00M	267.00M
Investing Cash Flow	-25.00M	-32.00M	-49.00M	-18.00M	-31.00M	-51.00M
Financing Cash Flow	-205.00M	-306.00M	-383.00M	-381.00M	-356.00M	-186.00M

Teradata Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 20.80
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

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 20.8 is below the 20-day moving average (MA) of 21.47, below the 50-day MA of 21.91, and below the 200-day MA of 25.81, indicating a bearish trend. The MACD of -0.33 indicates Positive momentum. The RSI at 44.21 is Neutral, neither overbought nor oversold. The STOCH value of 40.24 is Neutral, 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
MDB	77 Outperform	$18.65B	―	-4.00%	―	19.24%	59.66%
ZS	73 Outperform	$43.90B	―	-2.68%	―	25.46%	49.20%
HOOD	73 Outperform	$93.72B	53.66	23.54%	―	58.58%	508.72%
FOUR	71 Outperform	$7.56B	30.46	19.00%	―	27.39%	115.40%
S	64 Neutral	$5.73B	―	-26.98%	―	32.25%	20.56%
Sector *	61 Neutral	$34.83B	4.75	-10.43%	2.08%	6.55%	-9.99%
TDC	57 Neutral	$2.09B	18.37	87.65%	―	-6.74%	80.49%

Teradata Corporate Events

Teradata Stockholders Approve Amended Stock Incentive Plan

On May 15, 2025, Teradata Corporation’s stockholders approved the Amended 2023 Stock Incentive Plan, increasing the available shares by 3,687,000. During the Annual Meeting, stockholders also elected three Class III directors, approved executive compensation, and ratified PricewaterhouseCoopers LLP as the independent auditor for 2025, reflecting strong shareholder engagement and support for the company’s strategic initiatives.

The most recent analyst rating on (TDC) stock is a Hold with a $40.00 price target. To see the full list of analyst forecasts on Teradata stock, see the TDC Stock Forecast page.

Teradata Launches 2025 Employee Stock Inducement Plan

On May 14, 2025, Teradata‘s Board of Directors approved the Teradata 2025 New Employee Stock Inducement Plan (NESIP), effective May 15, 2025. This plan allows the company to offer equity incentives to new employees as an inducement to join Teradata, in accordance with NYSE rules. The NESIP includes a reserve of 1 million shares for various stock-based awards and is managed by the Compensation and People Committee. It is set to terminate on May 15, 2027, unless ended earlier by the Board, and does not require stockholder approval.

The most recent analyst rating on (TDC) stock is a Hold with a $40.00 price target. To see the full list of analyst forecasts on Teradata stock, see the TDC Stock Forecast page.