Teradyne (TER) AI Stock Analysis

• Market Cap: $30.57B
• Dividend Yield: 0.25%
• Average Volume (3M): 3.27M
• Price to Earnings (P/E): 71.0
• Beta (1Y): 1.86
• Revenue Growth: 4.56%
• EPS Growth: -15.44%
• Country: US
• Employees: 6,500
• Sector: Technology
• Sector Strength: 88
• Industry: Semiconductors
• EPS (TTM): 0.85
• Shares Outstanding: 156,608,300
• 10 Day Avg. Volume: 3,384,681
• 30 Day Avg. Volume: 3,272,650
• PEG Ratio: 2.15
• Price to Book (P/B): 7.11
• Price to Sales (P/S): 7.10
• P/FCF Ratio: 42.25
• Enterprise Value/Market Cap: 0.70
• Enterprise Value/Revenue: 7.45
• Enterprise Value/Gross Profit: 12.64
• Enterprise Value/Ebitda: 33.06
• 1Y Price Target: $205.25
• Price Target Upside: 5.16% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 17
• EPS Forecast (FY): 3.49
• Revenue Forecast (FY): $3.06B

• Rating: 71 Outperform
• Price Target: $224.00 ▲(14.77% Upside)

Teradyne's overall stock score reflects a stable financial position with strong AI-driven growth prospects. However, high valuation, potential technical pullbacks, and challenges in certain segments weigh on the score. The company's strategic focus on AI opportunities is a key strength, but profitability and operational efficiency need improvement.

Positive Factors

AI-Driven Growth

The surge in AI demand is driving significant growth in Teradyne's semiconductor test segment, indicating a strong market position in a rapidly expanding industry.

Strategic Expansion

The new operations hub in Michigan will enhance Teradyne's ability to meet growing demand, support U.S. manufacturing, and create over 200 jobs, strengthening its market presence.

Strong Cash Flow Generation

The significant increase in free cash flow indicates improved cash generation, providing Teradyne with greater financial flexibility for strategic investments and growth initiatives.

Negative Factors

Declining Operational Efficiency

Reduced operational efficiency and return on equity suggest challenges in maximizing profitability from existing resources, potentially impacting long-term financial performance.

High Operating Expenses

Rising operating expenses, driven by increased R&D and sales investments, could pressure margins and profitability, requiring careful management to sustain growth.

Weakness in Mobile and Auto Segments

Weak performance in mobile and auto segments may limit revenue growth and diversification, highlighting the need for strategic adjustments to capture opportunities in these markets.

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 through the sale of its test systems and automation solutions, which are critical for ensuring the reliability and performance of electronic devices. The company's revenue model is primarily based on direct sales of test equipment, software, and services, with significant revenue coming from its Semiconductor Test segment, where it provides solutions for testing chips used in smartphones, computers, and other electronic products. Additionally, the System Test segment contributes revenue through testing solutions for complex systems, such as those used in automotive and aerospace applications. Teradyne also benefits from recurring revenue through service contracts and software updates. Strategic partnerships with leading semiconductor manufacturers and technology companies further enhance Teradyne's market position and contribute to its financial performance.

Teradyne Financial Statement Overview

Summary

Teradyne's financial performance is stable with strong margins and low leverage. However, declining operational efficiency and reduced return on equity are concerns. Improved cash flow generation is a positive, but profitability challenges need addressing for sustained growth.

Income Statement

Teradyne's income statement shows a mixed performance. The TTM data indicates a modest revenue growth rate of 1.13%, which is a positive sign after previous periods of decline. Gross profit margin remains strong at approximately 58.9%, and the net profit margin is healthy at 15.49%. However, there is a noticeable decline in EBIT and EBITDA margins compared to previous years, indicating potential challenges in operational efficiency.

Balance Sheet

The balance sheet is robust with a low debt-to-equity ratio of 0.0678, indicating conservative leverage. The equity ratio is strong, reflecting a solid capital structure. However, the return on equity has significantly decreased to 0.0446% in the TTM, suggesting reduced profitability from equity investments.

Cash Flow

Cash flow analysis shows a significant increase in free cash flow growth at 40659.46% in the TTM, indicating improved cash generation. However, the operating cash flow to net income ratio has decreased to 0.395, suggesting less efficient conversion of income into cash. The free cash flow to net income ratio remains stable at 0.59, reflecting consistent cash flow management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.86B	2.82B	2.68B	3.16B	3.70B	3.12B
Gross Profit	1.68B	1.65B	1.54B	1.87B	2.21B	1.79B
EBITDA	644.25M	732.41M	640.26M	954.78M	1.30B	1.05B
Net Income	443.08M	542.37M	448.75M	715.50M	1.01B	784.15M
Balance Sheet
Total Assets	3.96B	3.71B	3.49B	3.50B	3.81B	3.65B
Cash, Cash Equivalents and Short-Term Investments	297.72M	599.67M	819.73M	894.38M	1.37B	1.44B
Total Debt	68.75M	76.62M	82.61M	132.88M	184.58M	472.76M
Total Liabilities	1.25B	889.42M	960.93M	1.05B	1.25B	1.44B
Stockholders Equity	2.72B	2.82B	2.53B	2.45B	2.56B	2.21B
Cash Flow
Free Cash Flow	456.83M	474.08M	425.59M	414.67M	965.89M	683.96M
Operating Cash Flow	675.33M	672.18M	585.23M	577.92M	1.10B	868.93M
Investing Cash Flow	-375.15M	-622.34M	-179.65M	43.75M	120.36M	-569.79M
Financing Cash Flow	-524.62M	-251.77M	-501.91M	-892.99M	-1.01B	-158.29M

Teradyne Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 195.18
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• 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 195.18 is above the 20-day moving average (MA) of 188.99, above the 50-day MA of 171.74, and above the 200-day MA of 115.18, indicating a bullish trend. The MACD of 6.57 indicates Positive momentum. The RSI at 58.31 is Neutral, neither overbought nor oversold. The STOCH value of 35.80 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
ON	73 Outperform	$22.22B	72.05	3.87%	―	-16.13%	-81.06%
TER	71 Outperform	$30.57B	71.04	15.77%	0.25%	4.56%	-15.44%
ASX	69 Neutral	$31.76B	29.18	11.17%	2.35%	8.01%	10.41%
AMKR	69 Neutral	$9.98B	32.55	7.27%	0.82%	0.13%	-16.17%
ENTG	66 Neutral	$12.74B	44.30	7.71%	0.48%	0.59%	25.65%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
STM	57 Neutral	$23.17B	45.39	3.00%	1.29%	-17.33%	-76.71%

Teradyne Corporate Events

Teradyne Appoints New CFO Amid Strategic Growth

On October 28, 2025, Teradyne announced the appointment of Michelle Turner as its new Vice President, Chief Financial Officer, and Treasurer, effective November 3, 2025. Turner, who brings 30 years of financial and strategic leadership experience, will replace Sanjay Mehta, who will remain as an executive advisor until his planned retirement in 2026. This leadership transition comes as Teradyne positions itself to capitalize on increasing demand in the semiconductor test industry driven by advances in AI, semiconductors, and industrial automation. Turner’s appointment is expected to strengthen Teradyne’s financial leadership and support its growth and strategic opportunities.