Teradata (TDC) AI Stock Analysis

• Market Cap: $2.80B
• Dividend Yield: N/A
• Average Volume (3M): 1.94M
• Price to Earnings (P/E): 22.3
• Beta (1Y): 0.74
• Revenue Growth: -8.18%
• EPS Growth: 46.26%
• Country: US
• Employees: 5,700
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): 0.74
• Shares Outstanding: 93,200,000
• 10 Day Avg. Volume: 3,251,767
• 30 Day Avg. Volume: 1,941,961
• PEG Ratio: 1.30
• Price to Book (P/B): 12.49
• Price to Sales (P/S): 1.73
• P/FCF Ratio: 10.05
• Enterprise Value/Market Cap: 1.05
• Enterprise Value/Revenue: 1.77
• Enterprise Value/Gross Profit: 2.97
• Enterprise Value/Ebitda: 10.14
• 1Y Price Target: $36.91
• Price Target Upside: 22.91% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 11
• EPS Forecast (FY): 2.62
• Revenue Forecast (FY): $1.64B

• Rating: 61 Neutral
• Price Target: $30.00 ▼(-0.10% Downside)
• Action: Reiterated Date: 02/25/26
• Date: Action: Reiterated 02/25/26

TDC scores as moderately attractive primarily due to strong free cash flow and improving margins, supported by earnings-call momentum (ARR stabilization, margin expansion, and continued buybacks) and a sizable litigation-settlement cash inflow. Offsetting factors include elevated leverage/thin equity, uneven top-line trends with FY2026 revenue guided flat-to-down, and mixed near-term technicals with the stock below key short-term moving averages.

Positive Factors

Free Cash Flow Strength

Consistent, high free cash flow (~$305M TTM and ~97% of net income) provides durable financial flexibility. It supports reinvestment, R&D, the $500M buyback plan, or debt paydown, lowering execution risk and enabling capital allocation even if revenues remain lumpy.

Margin Expansion and Profitability

Sustained high gross margins and improving EBIT/net margins reflect structural operating leverage in the platform business. Improved services margins and operating-margin gains suggest durable cost discipline and pricing power that can preserve profits through revenue volatility.

Cloud ARR & AI Product Momentum

Accelerating cloud ARR and 100% net expansion show customers expanding usage, a durable recurring revenue base. Combined with AI product launches and partner integrations, this structural shift increases long-term addressable market and sticky revenue despite near-term migration timing risks.

Negative Factors

Elevated Leverage / Thin Equity

A relatively small equity base and elevated leverage increase sensitivity to earnings shocks and limit strategic flexibility. Even with settlement proceeds, historical volatility in leverage and prior 4x+ levels mean balance-sheet risk remains a structural constraint on M&A or cyclical resilience.

Uneven Top-Line Trends

Persistent revenue declines and uneven growth across years reduce visibility into sustainable scale. With FY2026 guidance roughly flat-to-down, top-line softness constrains long-term margin carry and puts pressure on achieving consistent operating leverage despite improving unit economics.

Cloud Mix & Lumpy Migration Timing

The structural shift to cloud increases ARR but tends to compress recurring gross margins versus on‑prem subscriptions. Large migrations remain lumpy and timing uncertain, creating durable volatility in ARR conversion and near-term cash flow despite long-run strategic benefits.

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 primarily through the sale of its technology solutions and services. Key revenue streams include software licensing, cloud subscriptions, and professional services. The company offers various pricing models, such as one-time license fees for on-premises software and recurring fees for cloud services. Additionally, Teradata earns revenue from consulting services that help customers implement and optimize their data analytics solutions. Strategic partnerships with major cloud providers and technology firms also enhance its market reach and contribute to revenue growth by integrating Teradata's offerings with complementary products and services.

Teradata Financial Statement Overview

Summary

Profitability and cash generation are the core strengths (TTM ~59% gross margin, improving net margin ~7%, and strong free cash flow of ~$305M with ~97% FCF-to-net-income). The main constraint is balance-sheet risk: elevated leverage (~2.6x debt-to-equity) and a thin equity base, alongside uneven/declining revenue versus 2024.

Income Statement

TTM (Trailing-Twelve-Months) shows solid profitability with ~59% gross margin and ~11% EBIT margin, and net margin improving to ~7% versus ~6.5% in 2024 and ~3.4% in 2023. However, reported revenue is down versus 2024 ($1.66B vs. $1.75B), and recent years show uneven top-line momentum (declines in 2022 and 2024), which tempers the otherwise improving earnings profile.

Balance Sheet

Leverage is elevated: TTM debt-to-equity is ~2.6x, and the capital structure has been volatile with very high leverage in 2023–2024 (~4.7x and ~4.3x). Equity remains relatively thin (TTM ~$230M against ~$557M debt), increasing sensitivity to earnings swings. Positively, leverage improved from 2023–2024 levels, and returns on equity are strong, though partly amplified by the low equity base.

Cash Flow

Cash generation is a clear strength: TTM operating cash flow and free cash flow are both ~$305M, and free cash flow is close to net income (about 97%), indicating good earnings quality. Free cash flow rebounded strongly versus 2024 (TTM growth is high), though the multi-year pattern shows some variability (declines in 2022–2024). Operating cash flow relative to revenue is healthy for the period, supporting reinvestment and financial flexibility.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.66B	1.75B	1.83B	1.79B	1.92B
Gross Profit	993.00M	1.06B	1.11B	1.08B	1.19B
EBITDA	301.00M	293.00M	263.00M	225.00M	367.00M
Net Income	130.00M	114.00M	62.00M	33.00M	147.00M
Balance Sheet
Total Assets	1.78B	1.70B	1.87B	2.02B	2.17B
Cash, Cash Equivalents and Short-Term Investments	493.00M	420.00M	486.00M	569.00M	592.00M
Total Debt	561.00M	576.00M	640.00M	637.00M	572.00M
Total Liabilities	1.55B	1.57B	1.74B	1.76B	1.71B
Stockholders Equity	230.00M	133.00M	135.00M	258.00M	460.00M
Cash Flow
Free Cash Flow	286.00M	277.00M	355.00M	403.00M	432.00M
Operating Cash Flow	305.00M	303.00M	375.00M	419.00M	463.00M
Investing Cash Flow	-21.00M	-32.00M	-49.00M	-18.00M	-31.00M
Financing Cash Flow	-233.00M	-306.00M	-383.00M	-381.00M	-356.00M

Teradata Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 30.03
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• 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 Positive. The current price of 30.03 is below the 20-day moving average (MA) of 30.10, below the 50-day MA of 30.31, and above the 200-day MA of 24.74, indicating a bullish trend. The MACD of 0.28 indicates Positive momentum. The RSI at 49.96 is Neutral, neither overbought nor oversold. The STOCH value of 14.11 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TDC.

Teradata Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TOST	72 Outperform	$15.09B	46.85	18.64%	―	25.76%	―
FOUR	68 Neutral	$5.17B	26.93	15.52%	―	23.16%	27.38%
AKAM	62 Neutral	$14.51B	32.53	9.17%	―	4.21%	-0.63%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
TDC	61 Neutral	$2.80B	22.34	71.63%	―	-8.18%	46.26%
DBX	60 Neutral	$6.07B	13.16	―	―	-0.44%	2.47%

Teradata Corporate Events

Teradata Reaches Major Litigation Settlement with SAP SE

On February 19, 2026, Teradata entered into a settlement agreement with SAP SE and its U.S. affiliates to resolve all past and pending litigation between the parties, with mutual releases of all claims and liabilities tied to the disputes. Under the deal, Teradata is entitled to receive a gross payment of $480 million within 60 days of the effective date, after which both sides will ask the court to dismiss all claims, defenses and counterclaims with prejudice.

Teradata expects the net cash benefit from the settlement, after contingent fee arrangements and other legal costs but before taxes, to range between approximately $355 million and $362 million. The company is assessing how best to deploy these proceeds and has signaled that it will outline its plans on its first-quarter 2026 earnings call, a development that could materially affect its balance sheet flexibility and capital allocation options for shareholders.

The most recent analyst rating on (TDC) stock is a Buy with a $31.00 price target. To see the full list of analyst forecasts on Teradata stock, see the TDC Stock Forecast page.

Teradata enters cooperation agreement in governance-focused board refresh

On February 10, 2026, Teradata entered into a cooperation agreement with investor Lynrock Lake and related parties that will expand its board from nine to ten directors and is expected to add veteran finance and technology executive Melissa Fisher as a Class I director by March 1, 2026, subject to customary approvals. The deal, which includes a phased retirement of one Class I director after the 2026 annual meeting and one Class II director after the 2027 meeting, gives Lynrock Lake input into an additional independent director search and secures its support for Teradata’s 2026 director slate under voting, standstill and non‑disparagement commitments, underscoring an activist‑driven but collaborative board refresh aimed at bolstering governance and long‑term value for shareholders.

The cooperation agreement also provides Lynrock Lake with certain replacement rights for Fisher if it maintains a minimum ownership stake and caps Teradata’s reimbursement of the investor’s expenses at $100,000. By aligning with a significant shareholder while maintaining control over final board appointments and committee assignments, Teradata strengthens its governance framework and seeks to stabilize its shareholder base ahead of the 2026 proxy season, potentially reducing proxy conflict risk and signaling responsiveness to investor input on strategic oversight.

The most recent analyst rating on (TDC) stock is a Buy with a $49.00 price target. To see the full list of analyst forecasts on Teradata stock, see the TDC Stock Forecast page.