Teradata (TDC) AI Stock Analysis

• Market Cap: $1.97B
• Dividend Yield: N/A
• Average Volume (3M): 1.21M
• Price to Earnings (P/E): 18.4
• Beta (1Y): 1.07
• Revenue Growth: -6.74%
• EPS Growth: 80.49%
• Country: US
• Employees: 5,700
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): 0.47
• Shares Outstanding: 94,500,000
• 10 Day Avg. Volume: 1,017,302
• 30 Day Avg. Volume: 1,209,528
• 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: 1.20
• Enterprise Value/Revenue: 1.41
• Enterprise Value/Gross Profit: 2.39
• Enterprise Value/Ebitda: 8.89
• 1Y Price Target: $24.00
• Price Target Upside: 14.89% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 7

• Rating: 62 Neutral
• Price Target: $23.00 ▲(10.10% Upside)

Teradata's overall score reflects strong profitability and strategic initiatives in AI and cloud services. However, declining revenue growth, high leverage, and anticipated short-term ARR challenges weigh on the outlook.

Positive Factors

Cloud ARR Growth

Strong growth in cloud ARR indicates successful expansion in cloud services, aligning with strategic goals and enhancing long-term revenue potential.

AI and Strategic Partnerships

Partnerships and AI initiatives strengthen Teradata's competitive edge and innovation capacity, crucial for sustaining market leadership in analytics.

Executive Leadership Additions

New leadership is expected to drive strategic execution and innovation, enhancing Teradata's ability to navigate industry challenges and capitalize on growth opportunities.

Negative Factors

Declining Revenue Growth

Continued revenue decline suggests challenges in maintaining sales momentum, which could impact long-term financial stability and market position.

High Leverage

Significant reliance on debt financing increases financial risk, potentially limiting flexibility and affecting future investment and growth strategies.

Q3 ARR Expectations

Expected decline in ARR for Q3 indicates potential short-term challenges in revenue consistency, affecting investor confidence and strategic planning.

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 generates revenue through a combination of software licensing, cloud services, and consulting services. The primary revenue streams include software sales, which encompass both on-premises licenses and cloud subscriptions, as well as maintenance and support services for its products. Consulting services represent another significant revenue source, as the company assists clients in implementing and optimizing their data analytics solutions. Additionally, Teradata has formed strategic partnerships with major cloud providers, enabling the company to expand its cloud offerings and reach a broader customer base, further enhancing its revenue potential.

Teradata Financial Statement Overview

Summary

Teradata shows strong profitability with a high gross profit margin and improved net profit margin. However, declining revenue growth and high leverage are significant concerns, impacting financial stability.

Income Statement

Teradata's income statement shows a mixed performance. The TTM (Trailing-Twelve-Months) gross profit margin is strong at 60.07%, indicating efficient cost management. However, the revenue growth rate is negative at -1.64%, suggesting a decline in sales. The net profit margin improved to 8.10% in TTM, reflecting better profitability. EBIT and EBITDA margins are healthy, but the declining revenue growth is a concern.

Balance Sheet

The balance sheet reveals high leverage with a TTM debt-to-equity ratio of 3.72, indicating significant reliance on debt financing. Return on equity is low at 1.12%, suggesting limited returns for shareholders. The equity ratio is not provided, but the high debt levels pose a risk to financial stability.

Cash Flow

Cash flow analysis shows a positive trajectory with a TTM free cash flow growth rate of 1.42%. The operating cash flow to net income ratio is 0.30, and the free cash flow to net income ratio is 0.99, indicating strong cash generation relative to net income. This suggests good liquidity and cash management.

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	265.00M	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: 20.89
• 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 20.89 is below the 20-day moving average (MA) of 21.31, below the 50-day MA of 21.42, and below the 200-day MA of 22.81, indicating a bearish trend. The MACD of -0.15 indicates Positive momentum. The RSI at 43.59 is Neutral, neither overbought nor oversold. The STOCH value of 27.79 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
AKAM	―	$10.77B	26.63	9.21%	―	3.98%	-31.18%
FOUR	―	$5.86B	24.57	19.00%	―	23.86%	79.35%
TOST	―	$20.05B	100.29	14.51%	―	26.11%	―
INFA	―	$8.67B	―	-0.32%	―	1.16%	-104.62%
TDC	―	$1.97B	18.42	87.65%	―	-6.74%	80.49%
Sector *	―	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
DBX	―	$7.43B	17.38	―	―	-0.04%	-5.07%

Teradata Corporate Events

Teradata Corp’s Earnings Call: Mixed Signals Amid Growth and Challenges

Teradata Corp’s recent earnings call revealed a mixed sentiment, highlighting both significant achievements and ongoing challenges. The company showcased impressive growth in Annual Recurring Revenue (ARR) and advancements in artificial intelligence (AI), yet faced hurdles with declining revenue and margin pressures. While the strategic focus on cloud growth and AI capabilities presents promising future opportunities, near-term challenges with revenue and profitability remain evident.

Teradata’s Q2 2025: Cloud Growth Amid Revenue Challenges

Teradata Corporation is a leading provider of cloud analytics and data platforms, specializing in AI-driven solutions for data management and analytics across hybrid environments. In its second quarter of 2025 financial results, Teradata reported a modest increase in total annual recurring revenue (ARR) to $1.489 billion, with a significant 17% growth in public cloud ARR. However, the company faced declines in total revenue and recurring revenue, which decreased by 6% and 4% respectively, compared to the same period last year.