Teradyne (TER) AI Stock Analysis

• Market Cap: $18.99B
• Dividend Yield: 0.4%
• Average Volume (3M): 4.40M
• Price to Earnings (P/E): 41.4
• Beta (1Y): 1.73
• Revenue Growth: 4.83%
• EPS Growth: -9.47%
• Country: US
• Employees: 6,500
• Sector: Technology
• Sector Strength: 84
• Industry: Semiconductors
• EPS (TTM): 0.57
• Shares Outstanding: 159,073,530
• 10 Day Avg. Volume: 3,354,279
• 30 Day Avg. Volume: 4,398,373
• 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: 0.75
• Enterprise Value/Revenue: 5.01
• Enterprise Value/Gross Profit: 8.48
• Enterprise Value/Ebitda: 21.53
• 1Y Price Target: $111.38
• Price Target Upside: -7.34% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 14

• Rating: 80 Outperform
• Price Target: $133.00 ▲(10.65% Upside)

Teradyne's strong financial performance and positive earnings call outlook are the most significant factors driving the score. The technical analysis supports a bullish trend, though the high valuation and challenges in certain segments temper the overall score.

Positive Factors

Earnings

Shares have increased by 18% due to optimistic commentary on the potential to expand NVDA beyond their existing position.

Growth Potential

Securing a 'plan of record' from a major customer like Amazon is a huge positive.

Negative Factors

Financial Performance

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

Market Conditions

Industrial Automation's sluggish recovery continues as macro headwinds inhibit customer investments in the space.

Teradyne Business Overview & Revenue Model

Company Description

Teradyne, Inc. is a leading supplier of automation equipment for the electronics industry, headquartered in North Reading, Massachusetts. The company primarily operates in four key sectors: semiconductor test, system test, wireless test, and industrial automation. Teradyne's core products include automated test equipment (ATE) for semiconductors, as well as robotics and automation solutions for various industrial applications. Its innovative technologies enable customers to enhance product quality and accelerate time to market.

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. However, attention to revenue growth and return on equity could enhance financial performance further.

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	2.68B	3.16B	3.70B	3.12B
Gross Profit	1.67B	1.65B	1.54B	1.87B	2.21B	1.79B
EBITDA	658.47M	732.41M	640.26M	954.78M	1.30B	1.05B
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: 120.20
• 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 120.2 is above the 20-day moving average (MA) of 114.03, above the 50-day MA of 103.09, and above the 200-day MA of 100.76, indicating a bullish trend. The MACD of 5.04 indicates Negative momentum. The RSI at 69.39 is Neutral, neither overbought nor oversold. The STOCH value of 74.24 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	80 Outperform	$18.99B	41.41	16.85%	0.40%	4.83%	-9.47%
AMKR	76 Outperform	$6.00B	19.82	7.37%	2.99%	-1.20%	-19.46%
ON	69 Neutral	$19.66B	45.82	5.72%	―	-17.93%	-75.83%
ASX	67 Neutral	$22.23B	21.34	10.97%	3.40%	4.86%	6.44%
ENTG	67 Neutral	$12.07B	40.95	8.08%	0.49%	-1.86%	59.60%
STM	67 Neutral	$23.10B	38.56	3.72%	1.14%	-22.97%	-78.58%
Sector *	61 Neutral	$35.55B	8.88	-11.05%	1.87%	8.55%	-8.14%

Teradyne Corporate Events

Teradyne Robotics President Ujjwal Kumar Steps Down

On August 29, 2025, Ujjwal Kumar’s tenure as President of Teradyne Robotics ended. He will remain with the company until September 30, 2025, to transition his responsibilities. A separation agreement was made, granting him a cash severance of $1,130,000, paid in two installments, and a pro-rated annual bonus for 2025. The agreement includes restrictive covenants such as non-compete, non-solicitation, and non-disparagement clauses.

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.

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.