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Teradata Corp. (TDC)
NYSE:TDC
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Teradata
(NYSE:TDC)
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Rating:62Neutral
Price Target:
$23.00
▲(5.89% 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 (TDC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.10B
Dividend YieldN/A
Average Volume (3M)1.10M
Price to Earnings (P/E)19.2
Beta (1Y)1.02
Revenue Growth-6.74%
EPS Growth80.49%
CountryUS
Employees5,700
SectorTechnology
Sector Strength88
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)0.47
Shares Outstanding94,500,000
10 Day Avg. Volume1,379,507
30 Day Avg. Volume1,103,179
Financial Highlights & Ratios
PEG Ratio0.29
Price to Book (P/B)22.58
Price to Sales (P/S)1.72
P/FCF Ratio10.84
Enterprise Value/Market Cap1.12
Enterprise Value/Revenue1.41
Enterprise Value/Gross Profit2.39
Enterprise Value/Ebitda8.89
Forecast
1Y Price Target
$23.86Price Target Upside9.85% Upside
Rating ConsensusHold
Number of Analyst Covering7
Teradata Business Overview & Revenue Model
Company DescriptionTeradata 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 MoneyTeradata 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 Key Performance Indicators (KPIs)
Teradata Earnings Call Summary
Earnings Call Date:Aug 05, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 10, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted significant progress in ARR and cloud growth, strategic leadership additions, and promising AI and partnership initiatives. However, there were notable challenges with revenue declines and expectations for ARR in Q3, leading to a balanced outlook.Q2-2025 Updates
Positive Updates
Total ARR Growth
Teradata delivered total ARR of $1.49 billion in Q2, up 2% year-over-year, which provides confidence in achieving full-year targets.
Cloud ARR Performance
Cloud ARR reached $634 million with a solid 15% constant currency growth, in line with the full-year guidance range of 14% to 18%.
Executive Leadership Additions
Introduction of new executives including Sumeet Arora as Chief Product Officer and John Ederer as CFO, expected to aid ongoing strategic execution.
AI and GenAI Initiatives
Significant focus on AI and GenAI with new products like Teradata AI factory and Enterprise Vector Store, aimed at enhancing AI capabilities for customers.
Strategic Partnerships
New partnerships with ServiceNow and Fivetran to enhance data integration and AI insights, expected to drive value and innovation.
Negative Updates
Decline in Total Revenue
Total revenue was $408 million, down 6% year-over-year as reported and 7% in constant currency.
Services Revenue Decrease
Services revenue was $51 million, down 19% year-over-year as reported and 20% in constant currency.
Operating Margin Impact
Operating margin for Q2 was 16.4%, impacted by lower revenue and gross margins.
Q3 ARR Expectations
Sequential decline in Q3 ARR metrics anticipated due to deal pull-ins and extensions in Q2.
Company Guidance
In the Teradata Second Quarter 2025 Earnings Call, the company provided several key metrics and guidance updates. Total Annual Recurring Revenue (ARR) reached $1.49 billion, marking a 2% year-over-year increase, with cloud ARR contributing $634 million and growing at 15% in constant currency, aligning with the full-year guidance range of 14% to 18%. The company reiterated its outlook for total ARR, cloud ARR, and free cash flow for the fiscal year. Although total revenue was $408 million, down 6% year-over-year, and recurring revenue was $354 million, down 4%, the shift in deal timing led to expectations of a modest sequential decline in ARR for Q3. Teradata also announced significant enhancements in AI capabilities, including the introduction of the Teradata AI Factory, aimed at on-prem and cloud AI solutions, and partnerships with ServiceNow and Salesforce to leverage AI-driven workflows. Despite these fluctuations, Teradata remains confident in achieving total ARR growth by year-end and emphasized its strategic focus on driving long-term returns and optimizing its operating margin.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.65
Positive
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.50
Neutral
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.70
Positive
| 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
Negative
21.72
Price Trends
21.32
Positive
21.70
Positive
23.63
Negative
Market Momentum
0.18
Positive
49.29
Neutral
29.76
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 21.72 is below the 20-day moving average (MA) of 21.97, above the 50-day MA of 21.32, and below the 200-day MA of 23.63, indicating a neutral trend. The MACD of 0.18 indicates Positive momentum. The RSI at 49.29 is Neutral, neither overbought nor oversold. The STOCH value of 29.76 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TDC.
Teradata Risk Analysis
Teradata disclosed 26 risk factors in its most recent earnings report. Teradata reported the most risks in the "Tech & Innovation" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Teradata Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $7.03B | 29.41 | 19.00% | ― | 23.86% | 79.35% | |
73 Outperform | $21.40B | 107.49 | 14.51% | ― | 26.11% | ― | |
72 Outperform | $10.98B | 27.20 | 9.21% | ― | 3.98% | -31.18% | |
69 Neutral | $7.73B | 17.85 | -60.11% | ― | -0.04% | -5.07% | |
67 Neutral | $8.69B | 5,259.57 | -0.32% | ― | 1.16% | -104.62% | |
62 Neutral | $2.10B | 19.19 | 87.65% | ― | -6.74% | 80.49% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
TDC
Teradata
21.72
-9.75
-30.98%
AKAM
Akamai
75.50
-28.72
-27.56%
DBX
Dropbox
29.17
3.27
12.63%
FOUR
Shift4 Payments
79.37
-17.03
-17.67%
TOST
Toast Inc
36.86
8.52
30.06%
INFA
Informatica
24.92
-1.48
-5.61%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.