Teradyne (TER) AI Stock Analysis

• Market Cap: $17.79B
• Dividend Yield: 0.43%
• Average Volume (3M): 4.33M
• Price to Earnings (P/E): 38.8
• Beta (1Y): 1.72
• Revenue Growth: 4.83%
• EPS Growth: -9.47%
• Country: US
• Employees: 6,500
• Sector: Technology
• Sector Strength: 94
• Industry: Semiconductors
• EPS (TTM): 0.57
• Shares Outstanding: 159,073,530
• 10 Day Avg. Volume: 4,710,703
• 30 Day Avg. Volume: 4,334,937
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.80
• Enterprise Value/Revenue: 5.02
• Enterprise Value/Gross Profit: 8.48
• Enterprise Value/Ebitda: 21.57
• 1Y Price Target: $110.21
• Price Target Upside: 0.72% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 15

• Rating: 73 Outperform
• Price Target: $120.00 ▲(9.67% Upside)

Teradyne's strong financial performance and positive earnings call sentiment are the most significant factors driving the overall score. Technical analysis suggests bullish momentum, although the stock may be overvalued based on valuation metrics. Challenges in specific business segments are offset by strategic growth initiatives, particularly in AI compute.

Positive Factors

Earnings

The shares are up 18% on the back of optimistic commentary on the prospects of penetrating NVDA beyond their existing position.

Financial Performance

Positives in the quarter include a HBM4 wafer sort win with a new HBM customer and increased share buyback program of $1B.

Strategic Partnerships

Confidence in gaining share with NVDA as Teradyne was 'invited to the dance' and now has a 'level playing field for new devices'.

Negative Factors

Demand Fluctuations

There are concerns that SoC test demand could see a step down due to lower end consumption.

Industrial Automation

The Industrial Automation business is not expected to break-even this year.

Market Conditions

The stock is rated Underperform due to the binary nature of a potential NVDA win and timing uncertainty.

Teradyne Business Overview & Revenue Model

Company Description

Teradyne, Inc. designs, develops, manufactures, sells, and supports automatic test equipment worldwide. The company operates through Semiconductor Test, System Test, Industrial Automation, and Wireless Test segments. The Semiconductor Test segment offers products and services for wafer level and device package testing in automotive, industrial, communications, consumer, smartphones, cloud computer and electronic game, and other applications. This segment also provides FLEX test platform systems; J750 test system to address the volume semiconductor devices; Magnum platform that tests memory devices, such as flash memory and DRAM; and ETS platform for semiconductor manufacturers, and assembly and test subcontractors in the analog/mixed signal markets. It serves integrated device manufacturers that integrate the fabrication of silicon wafers into their business; fabless companies that outsource the manufacturing of silicon wafers; foundries; and semiconductor assembly and test providers. The System Test segment offers defense/aerospace test instrumentation and systems; storage test systems; and circuit-board test and inspection systems. The Industrial Automation segment provides collaborative robotic arms, autonomous mobile robots, and advanced robotic control software for manufacturing, logistics, and light industrial customers. The Wireless Test segment provides test solutions for use in the development and manufacture of wireless devices and modules, smartphones, tablets, notebooks, laptops, peripherals, and Internet-of-Things devices under the LitePoint brand name. This segment also offers IQxel products for Wi-Fi and other standards; IQxstream solution for testing GSM, EDGE, CDMA2000, TD-SCDMA, WCDMA, HSPA+, LTE, and 5G technologies; IQcell, a multi-device cellular signaling test solution; IQgig test solution; and turnkey test software for wireless chipsets. Teradyne, Inc. was incorporated in 1960 and is headquartered in North Reading, Massachusetts.

How the Company Makes Money

Teradyne generates revenue primarily through the sale of its test systems, which include semiconductor test equipment, system test solutions, and wireless test products. The company earns significant income from the semiconductor industry, where it provides testing solutions for chips used in a wide range of electronic devices. Additionally, Teradyne has a growing industrial automation segment that contributes to its revenue through the sale of collaborative robots (cobots) and associated software. The company benefits from long-term relationships with major technology firms, which often rely on Teradyne's products for their manufacturing processes. Furthermore, maintenance and support services for its equipment also represent a recurring revenue stream, enhancing the overall financial stability of the company.

Teradyne Financial Statement Overview

Summary

Teradyne exhibits strong financial health with robust profitability, efficient cash flow management, and a solid balance sheet with low leverage. There is potential for growth despite some concerns over revenue growth and fluctuating return on equity.

Income Statement

Teradyne shows strong profitability with a robust gross profit margin of approximately 59% in TTM (Trailing-Twelve-Months) and consistent net income growth over the years. The EBIT and EBITDA margins remain healthy, indicating operational efficiency. Despite a slight revenue decline in the past annual period, recent TTM data suggests recovery and potential for growth.

Balance Sheet

The company's balance sheet is strong with a very low debt-to-equity ratio, reflecting minimal leverage and lower financial risk. The equity ratio is highly favorable, suggesting a solid financial foundation. However, the return on equity has shown some fluctuations, which could be an area for improvement.

Cash Flow

Teradyne demonstrates impressive cash flow management with a positive free cash flow trend and a strong operating cash flow to net income ratio. The company effectively converts income into cash, supporting ongoing operations and investments. The free cash flow growth rate is commendable, indicating effective capital expenditure management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.83B	2.82B	2.67B	3.15B	3.70B	3.12B
Gross Profit	1.67B	1.54B	1.45B	1.88B	2.20B	1.77B
EBITDA	657.15M	732.41M	640.50M	954.20M	1.29B	1.04B
Net Income	469.17M	542.37M	448.75M	715.50M	1.01B	784.15M
Balance Sheet
Total Assets	3.76B	3.71B	3.49B	3.50B	3.81B	3.65B
Cash, Cash Equivalents and Short-Term Investments	367.89M	599.67M	819.73M	894.38M	1.37B	1.44B
Total Debt	74.46M	76.62M	82.61M	132.88M	184.58M	472.76M
Total Liabilities	924.56M	889.42M	960.93M	1.05B	1.25B	1.44B
Stockholders Equity	2.84B	2.82B	2.53B	2.45B	2.56B	2.21B
Cash Flow
Free Cash Flow	568.90M	474.08M	425.59M	414.67M	965.89M	683.96M
Operating Cash Flow	792.55M	672.18M	585.23M	577.92M	1.10B	868.93M
Investing Cash Flow	-357.49M	-622.34M	-179.65M	43.75M	120.36M	-569.79M
Financing Cash Flow	-506.11M	-251.77M	-501.91M	-892.99M	-1.01B	-158.29M

Teradyne Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 109.42
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TER, the sentiment is Positive. The current price of 109.42 is above the 20-day moving average (MA) of 102.35, above the 50-day MA of 94.97, and above the 200-day MA of 100.30, indicating a bullish trend. The MACD of 5.01 indicates Negative momentum. The RSI at 61.82 is Neutral, neither overbought nor oversold. The STOCH value of 76.94 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TER.

Teradyne Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TER	73 Outperform	$17.79B	38.79	16.85%	0.43%	4.83%	-9.47%
SWKS	71 Outperform	$11.19B	30.03	6.61%	3.72%	-8.24%	-48.31%
ALAB	68 Neutral	$31.70B	334.37	10.11%	―	163.80%	―
ASX	66 Neutral	$21.44B	20.26	10.97%	3.62%	4.86%	6.44%
ENTG	63 Neutral	$11.96B	40.55	8.08%	0.51%	-1.86%	59.60%
ON	63 Neutral	$21.11B	48.16	5.72%	―	-17.93%	-75.83%
Sector *	61 Neutral	$36.30B	7.26	-7.27%	1.97%	7.74%	-7.92%

Teradyne Corporate Events

Teradyne Appoints New Independent Directors for Growth

On June 26, 2025, Teradyne announced the appointment of Drew Henry and Necip Sayiner as independent directors, effective July 1, 2025, as part of a board refreshment process. These appointments aim to align the board with Teradyne’s strategic priorities, leveraging Henry’s semiconductor industry experience and Sayiner’s technical expertise to enhance shareholder value and drive growth in the Semiconductor Test and Product Test businesses.

The most recent analyst rating on (TER) stock is a Buy with a $185.00 price target. To see the full list of analyst forecasts on Teradyne stock, see the TER Stock Forecast page.

Teradyne Amends By-Laws for Shareholder Proposals

On June 20, 2025, Teradyne, Inc.’s Board of Directors amended the company’s By-Laws, effective immediately. The changes include adjustments to director nomination and shareholder proposal notice windows, updates to procedural requirements for shareholder nominations and proposals, and clarifications on voting standards and meeting conduct. These amendments impact the process for shareholders wishing to nominate directors or make proposals at the 2026 annual meeting, requiring notices to be submitted between January 9 and February 8, 2026.

The most recent analyst rating on (TER) stock is a Buy with a $185.00 price target. To see the full list of analyst forecasts on Teradyne stock, see the TER Stock Forecast page.

Teradyne Shareholders Approve Updated Compensation Plan

On May 9, 2025, Teradyne, Inc. held its annual meeting of shareholders, where several key proposals were voted on. The shareholders approved an amended Equity and Cash Compensation Incentive Plan, which updates the previous 2006 Plan by incorporating compensation governance best practices and removing its term limit. Additionally, the election of directors, approval of executive compensation, and ratification of PricewaterhouseCoopers LLP as the independent auditor for 2025 were confirmed. However, a proposal requiring the company to report on political contributions was not approved.

The most recent analyst rating on (TER) stock is a Buy with a $185.00 price target. To see the full list of analyst forecasts on Teradyne stock, see the TER Stock Forecast page.