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Teradyne
(NASDAQ:TER)
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Rating:71Outperform
Price Target:
$406.00
▲(16.03% Upside)
Action:Reiterated
Date:07/29/26
The score is driven primarily by strong underlying financial performance (high margins and a conservative balance sheet) and a constructive earnings-call outlook supported by robust recent execution and cash generation. These positives are tempered by weak near-term technical positioning (below key moving averages) and a rich valuation (high P/E with minimal dividend yield).
Positive Factors
High and sustainable margins
Teradyne reports materially high gross and operating margins (near ~59% and ~34% in Q2), reflecting durable product-level profitability. Such margin elasticity — supported historically by ~57%–60% gross margins — underpins persistent cash generation and funds R&D, CapEx and shareholder returns even across cyclical revenue swings.
Negative Factors
Uneven cash conversion and volatile FCF
Although free cash flow is generally positive, inconsistent cash conversion (operating cash flow < net income in multiple years and volatile FCF growth) creates durable forecasting risk. This variability can constrain predictable capital allocation and makes multi-quarter planning for buybacks, dividends and reinvestment more uncertain.
Read all positive and negative factors
Positive Factors
Negative Factors
High and sustainable margins
Teradyne reports materially high gross and operating margins (near ~59% and ~34% in Q2), reflecting durable product-level profitability. Such margin elasticity — supported historically by ~57%–60% gross margins — underpins persistent cash generation and funds R&D, CapEx and shareholder returns even across cyclical revenue swings.
Read all positive factors
Teradyne Key Performance Indicators (KPIs)
Any
Revenue by Segment
Highlights income from different business units, shedding light on which segments drive growth and profitability, and where the company might face challenges.
Highlights income from different business units, shedding light on which segments drive growth and profitability, and where the company might face challenges.
Data provided by:
The Fly
The FlyTeradyne (TER) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$57.21B
Dividend Yield0.14%
Average Volume (3M)4.55M
Price to Earnings (P/E)50.2
Beta (1Y)1.60
Revenue Growth57.91%
EPS Growth153.54%
CountryUS
Employees6,600
SectorTechnology
Sector Strength88
IndustrySemiconductors
Share Statistics
EPS (TTM)7.33
Shares Outstanding156,542,160
10 Day Avg. Volume2,965,330
30 Day Avg. Volume4,553,089
Financial Highlights & Ratios
PEG Ratio23.64
Price to Book (P/B)10.83
Price to Sales (P/S)9.49
P/FCF Ratio67.22
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$474.20Price Target Upside35.52% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering12
EPS Forecast (FY)7.62
Revenue Forecast (FY)$5.15B
Teradyne Business Overview & Revenue Model
Company Description
Teradyne, Inc. (TER) designs and manufactures automatic test equipment and related solutions used to test semiconductors and electronic systems, and it also provides industrial automation products. The company’s primary operations are in semicondu...
How the Company Makes Money
Teradyne makes money primarily by selling capital equipment and related offerings used in electronics manufacturing and automation. Its key revenue streams include: (1) Semiconductor test systems: revenue from the sale of automatic test equipment ...
Teradyne Earnings Call Summary
Earnings Call Date:Jul 28, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 27, 2026
Earnings Call Sentiment Positive
The call conveyed strong, broad-based operational and financial momentum driven by AI demand—record revenue, substantial YoY EPS gains, robust cash flow, and multiple end-market expansions. Management reinforced confidence in multiyear TAM growth and midterm share gains while signaling continued investment and a tightened but cautious near-term guide. Key near-term risks include product-mix and memory-driven margin pressure, inventory buildup, supply-chain/qualification timing, and uncertainty in some emerging TAM estimates (e.g., CPO and silicon photonics). Overall, positives around revenue, margins (YoY), cash generation and AI-driven demand outweigh the flagged near-term headwinds and uncertainties.Positive Updates
Record Revenue and Earnings
Total company revenue topped $1.3 billion (Q2 2026), up over 100% year-over-year. Non-GAAP EPS was $2.47, up over 300% year-over-year. First half 2026 revenue was $2.6 billion and non-GAAP EPS was $5.02 (approximately +100% and +275% YoY, respectively).
Negative Updates
Sequential Gross Margin Pressure
Gross margin was down 110 basis points sequentially (despite +250 bps YoY). Management attributed the sequential dip in part to one-time favorable items in Q1 and expects Q3 gross margins of 58%–59% due to product mix and new product introductions.
Read all updates
Q2-2026 Updates
Positive
Negative
Record Revenue and Earnings
Total company revenue topped $1.3 billion (Q2 2026), up over 100% year-over-year. Non-GAAP EPS was $2.47, up over 300% year-over-year. First half 2026 revenue was $2.6 billion and non-GAAP EPS was $5.02 (approximately +100% and +275% YoY, respectively).
Read all positive updates
Company Guidance
Teradyne guided third-quarter revenue of $1.2–$1.3 billion and non‑GAAP EPS of $1.85–$2.15, with gross margins of 58%–59%, operating expenses about 29%–30% of sales, and a non‑GAAP operating profit rate of 28%–30%; management sees first‑half 2026 representing 50%–52% of annual revenue, expects the second half to outpace the first on strength in memory, auto/industrial, IST, product test and robotics (offset by softness in mobile and compute order timing), and said Q4 OpEx should be comparable to Q3. They reiterated a full‑year gross‑margin target near ~59% (just shy of their target earnings model), expressed confidence in healthy 2027 growth tied to WFE/transistor and bit trends, and highlighted balance‑sheet and cash metrics of $517M cash & investments, $579M free cash flow for H1, Q2 CapEx of $26M, $20M of dividends and $69M of buybacks while continuing R&D and demo CapEx to support 2027.Teradyne Financial Statement Overview
Summary
Income Statement
77
Positive
Balance Sheet
90
Very Positive
Cash Flow
70
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 4.46B | 3.19B | 2.82B | 2.68B | 3.16B | 3.70B |
| Gross Profit | 2.65B | 1.87B | 1.65B | 1.54B | 1.87B | 2.21B |
| EBITDA | 1.45B | 768.08M | 732.41M | 640.26M | 954.78M | 1.30B |
| Net Income | 1.15B | 554.05M | 542.37M | 448.75M | 715.50M | 1.01B |
Balance Sheet | ||||||
| Total Assets | 4.93B | 4.17B | 3.71B | 3.49B | 3.50B | 3.81B |
| Cash, Cash Equivalents and Short-Term Investments | 354.83M | 322.00M | 599.67M | 819.73M | 894.38M | 1.37B |
| Total Debt | 100.13M | 347.14M | 134.54M | 147.71M | 197.06M | 240.76M |
| Total Liabilities | 1.45B | 1.37B | 889.42M | 960.93M | 1.05B | 1.25B |
| Stockholders Equity | 3.44B | 2.80B | 2.82B | 2.53B | 2.45B | 2.56B |
Cash Flow | ||||||
| Free Cash Flow | 927.92M | 450.41M | 474.08M | 425.59M | 414.67M | 965.89M |
| Operating Cash Flow | 1.19B | 674.41M | 672.18M | 585.23M | 577.92M | 1.10B |
| Investing Cash Flow | -467.01M | -368.62M | -622.34M | -179.65M | 43.75M | 120.36M |
| Financing Cash Flow | -637.98M | -562.25M | -251.77M | -501.91M | -892.99M | -1.01B |
Teradyne Technical Analysis
Positive
349.92
Price Trends
380.44
Negative
359.44
Positive
289.27
Positive
Market Momentum
-11.25
Negative
45.59
Neutral
82.02
Negative
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 349.92 is above the 20-day moving average (MA) of 349.33, below the 50-day MA of 380.44, and above the 200-day MA of 289.27, indicating a neutral trend. The MACD of -11.25 indicates Negative momentum. The RSI at 45.59 is Neutral, neither overbought nor oversold. The STOCH value of 82.02 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TER.
Teradyne Risk Analysis
Teradyne disclosed 34 risk factors in its most recent earnings report. Teradyne reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Teradyne Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $57.21B | 50.16 | 29.72% | 0.14% | 57.91% | 153.54% | |
63 Neutral | $32.59B | 57.88 | 7.45% | ― | -9.04% | -4.21% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
60 Neutral | $17.86B | 68.42 | 6.74% | 0.31% | -0.25% | -15.17% | |
59 Neutral | $11.99B | 22.26 | 12.37% | 0.51% | 17.93% | 82.27% | |
56 Neutral | $46.98B | 99.40 | 2.66% | 0.70% | 10.06% | -27.68% | |
53 Neutral | $68.74B | 39.90 | 14.45% | 1.13% | 15.55% | 43.35% |
* Technology Sector Average
TER
Teradyne
367.69
262.24
248.69%
ASX
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AMKR
Amkor
49.87
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125.06%
ENTG
Entegris
119.05
45.63
62.14%
ON
ON Semiconductor
81.61
33.64
70.13%
STM
STMicroelectronics
52.39
27.50
110.44%
Teradyne Corporate Events
Executive/Board ChangesShareholder Meetings
Teradyne Shareholders Approve Directors, Pay and Auditor
Positive
May 11, 2026
On May 8, 2026, Teradyne, Inc. held its 2026 annual meeting of shareholders, where investors elected a slate of directors, including Drew Henry, Peter Herweck, Mercedes Johnson and others, to serve until the next annual meeting. The voting results...
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.