Teradata (TDC) AI Stock Analysis

• Market Cap: $2.06B
• Dividend Yield: N/A
• Average Volume (3M): 1.02M
• Price to Earnings (P/E): 15.2
• Beta (1Y): 0.96
• Revenue Growth: -6.53%
• EPS Growth: 240.56%
• Country: US
• Employees: 5,700
• Sector: Technology
• Sector Strength: 78
• Industry: Software - Infrastructure
• EPS (TTM): 0.66
• Shares Outstanding: 95,600,000
• 10 Day Avg. Volume: 995,416
• 30 Day Avg. Volume: 1,020,282
• PEG Ratio: 0.49
• Price to Book (P/B): 16.14
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 7.32
• Enterprise Value/Market Cap: 1.12
• Enterprise Value/Revenue: 0.32
• Enterprise Value/Gross Profit: 2.18
• Enterprise Value/Ebitda: 2.06
• 1Y Price Target: $25.57
• Price Target Upside: 18.71% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 8

• Rating: 66 Neutral
• Price Target: $23.50 ▲( 9.10% Upside)

The overall score of 66 reflects a balanced view of Teradata's prospects. Strong financial performance in terms of profitability and cash flow is a key strength, but is offset by financial stability risks due to high leverage. Technical indicators suggest a bearish trend, and while valuation is fair, the lack of dividend yield is a downside. The company is making strategic moves with leadership changes and innovation focus, but faces challenges with declining ARR and revenue.

Positive Factors

Cloud Performance

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

Partnerships

Teradata announced its partnership with NVIDIA, using NVIDIA's NeMo Retriever to enable customers to use information and insights from unstructured data sources and build RAG-based applications.

Product Capabilities

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

Negative Factors

Competitive Dynamics

Teradata has faced challenges such as on-prem erosions, elongated sales cycles, and staged migrations, raising concerns about underlying competitive dynamics eroding the business.

C-Suite Changes

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

Revenue Expectations

Total revenue growth was lower than expected, and the consulting business is experiencing weakening 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 displays a stable financial position with strong profitability margins and efficient cash flow generation. However, the high leverage and declining revenue growth present potential risks. The company has improved net profitability over time, which is a positive indicator for future performance.

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
277.00M	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: 21.54
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• 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 Negative. The current price of 21.54 is below the 20-day moving average (MA) of 22.36, below the 50-day MA of 22.00, and below the 200-day MA of 27.54, indicating a bearish trend. The MACD of 0.09 indicates Positive momentum. The RSI at 42.56 is Neutral, neither overbought nor oversold. The STOCH value of 9.10 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
ZS	79 Outperform	$39.32B	―	-1.21%	―	27.77%	89.39%
FOUR	77 Outperform	$7.90B	30.13	30.28%	―	27.39%	115.40%
HOOD	74 Outperform	$55.75B	36.05	21.43%	―	58.74%	1127.29%
TDC	66 Neutral	$2.06B	15.19	130.19%	―	-6.53%	240.56%
MDB	66 Neutral	$15.19B	―	-6.70%	―	19.22%	28.46%
S	64 Neutral	$6.54B	―	-17.68%	―	32.25%	20.56%
Sector *	61 Neutral	$11.28B	10.16	-6.88%	2.97%	7.41%	-8.93%

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.

Teradata Appoints John Ederer as New CFO

On May 5, 2025, Teradata announced the appointment of John Ederer as Chief Financial Officer, effective May 12, 2025. Ederer brings extensive experience in the software industry, having previously served as CFO at Model N and K2 Software. His appointment is expected to strengthen Teradata’s financial operations and support its strategy in the AI market, leveraging his expertise in financial management and investor relations to drive profitable growth.