TDC gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 278 industry peers in the Software industry. TDC has an excellent profitability rating, but there are concerns on its financial health. TDC is valued quite cheap, but it does not seem to be growing.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

TDC had positive earnings in the past year.
TDC had a positive operating cash flow in the past year.
TDC had positive earnings in each of the past 5 years.
Each year in the past 5 years TDC had a positive operating cash flow.

1.2 Ratios

TDC has a better Return On Assets (6.70%) than 75.54% of its industry peers.
TDC has a better Return On Equity (53.88%) than 97.12% of its industry peers.
With an excellent Return On Invested Capital value of 13.90%, TDC belongs to the best of the industry, outperforming 91.73% of the companies in the same industry.
TDC had an Average Return On Invested Capital over the past 3 years of 12.22%. This is in line with the industry average of 10.74%.
The last Return On Invested Capital (13.90%) for TDC is above the 3 year average (12.22%), which is a sign of increasing profitability.

		Industry Rank	Sector Rank
ROA	6.7%
ROE	53.88%
ROIC	13.9%

ROA(3y)3.88%

ROA(5y)4.86%

ROE(3y)48.14%

ROE(5y)41.73%

ROIC(3y)12.22%

ROIC(5y)9.98%

1.3 Margins

TDC has a better Profit Margin (7.15%) than 66.91% of its industry peers.
TDC's Profit Margin has declined in the last couple of years.
TDC has a better Operating Margin (11.75%) than 77.34% of its industry peers.
TDC's Operating Margin has improved in the last couple of years.
TDC has a worse Gross Margin (58.99%) than 63.67% of its industry peers.
In the last couple of years the Gross Margin of TDC has grown nicely.

		Industry Rank	Sector Rank
OM	11.75%
PM (TTM)	7.15%
GM	58.99%

OM growth 3Y-0.3%

OM growth 5Y86.69%

PM growth 3Y-5.29%

PM growth 5YN/A

GM growth 3Y-0.77%

GM growth 5Y3.75%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

TDC has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
The number of shares outstanding for TDC has been reduced compared to 1 year ago.
TDC has less shares outstanding than it did 5 years ago.
TDC has a better debt/assets ratio than last year.

2.2 Solvency

Based on the Altman-Z score of 0.77, we must say that TDC is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of TDC (0.77) is worse than 65.83% of its industry peers.
The Debt to FCF ratio of TDC is 2.00, which is a good value as it means it would take TDC, 2.00 years of fcf income to pay off all of its debts.
TDC has a better Debt to FCF ratio (2.00) than 68.35% of its industry peers.
A Debt/Equity ratio of 2.21 is on the high side and indicates that TDC has dependencies on debt financing.
With a Debt to Equity ratio value of 2.21, TDC is not doing good in the industry: 82.37% of the companies in the same industry are doing better.
Even though the debt/equity ratio score it not favorable for TDC, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.

		Industry Rank	Sector Rank
Debt/Equity	2.21
Debt/FCF	2
Altman-Z	0.77

ROIC/WACC1.34

WACC10.4%

2.3 Liquidity

A Current Ratio of 0.90 indicates that TDC may have some problems paying its short term obligations.
Looking at the Current ratio, with a value of 0.90, TDC is doing worse than 79.50% of the companies in the same industry.
A Quick Ratio of 0.89 indicates that TDC may have some problems paying its short term obligations.
TDC has a Quick ratio of 0.89. This is amonst the worse of the industry: TDC underperforms 80.22% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	0.9
Quick Ratio	0.89

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

TDC shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -3.25%.
Measured over the past years, TDC shows a quite strong growth in Earnings Per Share. The EPS has been growing by 18.27% on average per year.
The Revenue has decreased by -8.18% in the past year.
Measured over the past years, TDC shows a decrease in Revenue. The Revenue has been decreasing by -1.62% on average per year.

EPS 1Y (TTM)-3.25%

EPS 3Y0%

EPS 5Y18.27%

EPS Q2Q%4.35%

Revenue 1Y (TTM)-8.18%

Revenue growth 3Y-2.99%

Revenue growth 5Y-1.62%

Sales Q2Q%-5.45%

3.2 Future

The Earnings Per Share is expected to grow by 6.63% on average over the next years.
TDC is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 0.30% yearly.

EPS Next Y-0.06%

EPS Next 2Y2.48%

EPS Next 3Y4.06%

EPS Next 5Y6.63%

Revenue Next Year-6.38%

Revenue Next 2Y-3.42%

Revenue Next 3Y-2.11%

Revenue Next 5Y0.3%

3.3 Evolution

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

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4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 12.34 indicates a correct valuation of TDC.
TDC's Price/Earnings ratio is rather cheap when compared to the industry. TDC is cheaper than 85.97% of the companies in the same industry.
When comparing the Price/Earnings ratio of TDC to the average of the S&P500 Index (27.21), we can say TDC is valued rather cheaply.
TDC is valuated reasonably with a Price/Forward Earnings ratio of 11.51.
Based on the Price/Forward Earnings ratio, TDC is valued cheaper than 85.97% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of TDC to the average of the S&P500 Index (25.98), we can say TDC is valued rather cheaply.

		Industry Rank	Sector Rank
PE	12.34
Fwd PE	11.51

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, TDC is valued cheaply inside the industry as 87.41% of the companies are valued more expensively.
92.81% of the companies in the same industry are more expensive than TDC, based on the Price/Free Cash Flow ratio.

		Industry Rank	Sector Rank
P/FCF	9.7
EV/EBITDA	10.23

4.3 Compensation for Growth

TDC has a very decent profitability rating, which may justify a higher PE ratio.

PEG (NY)N/A

PEG (5Y)0.68

EPS Next 2Y2.48%

EPS Next 3Y4.06%

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5. Dividend

5.1 Amount

TDC does not give a dividend.

		Industry Rank	Sector Rank
Dividend Yield	0%

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TERADATA CORP / TDC FAQ

What is the fundamental rating for TDC stock?

ChartMill assigns a fundamental rating of 5 / 10 to TDC.

Can you provide the valuation status for TERADATA CORP?

ChartMill assigns a valuation rating of 7 / 10 to TERADATA CORP (TDC). This can be considered as Undervalued.

How profitable is TERADATA CORP (TDC) stock?

TERADATA CORP (TDC) has a profitability rating of 7 / 10.

Can you provide the expected EPS growth for TDC stock?

The Earnings per Share (EPS) of TERADATA CORP (TDC) is expected to decline by -0.06% in the next year.