TERADYNE INC (TER) Stock Fundamental Analysis
NASDAQ:TER - Nasdaq - US8807701029 - Common Stock
Taking everything into account, TER scores 7 out of 10 in our fundamental rating. TER was compared to 109 industry peers in the Semiconductors & Semiconductor Equipment industry. TER has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. TER is quite expensive at the moment. It does show a decent growth rate. This makes TER very considerable for quality investing!
1. Profitability
1.1 Basic Checks
TER had positive earnings in the past year.
TER had a positive operating cash flow in the past year.
In the past 5 years TER has always been profitable.
Each year in the past 5 years TER had a positive operating cash flow.
1.2 Ratios
TER has a Return On Assets of 13.61%. This is amongst the best in the industry. TER outperforms 81.48% of its industry peers.
Looking at the Return On Equity, with a value of 17.68%, TER is in the better half of the industry, outperforming 79.63% of the companies in the same industry.
The Return On Invested Capital of TER (14.07%) is better than 84.26% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for TER is significantly above the industry average of 11.96%.
The 3 year average ROIC (25.46%) for TER is well above the current ROIC(14.07%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.61% | ||
| ROE | 17.68% | ||
| ROIC | 14.07% |
ROA(3y)19.98%
ROA(5y)19.64%
ROE(3y)28.84%
ROE(5y)30.72%
ROIC(3y)25.46%
ROIC(5y)24.68%
1.3 Margins
The Profit Margin of TER (18.75%) is better than 77.78% of its industry peers.
TER's Profit Margin has declined in the last couple of years.
Looking at the Operating Margin, with a value of 19.14%, TER is in the better half of the industry, outperforming 76.85% of the companies in the same industry.
In the last couple of years the Operating Margin of TER has declined.
TER's Gross Margin of 57.76% is amongst the best of the industry. TER outperforms 81.48% of its industry peers.
TER's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.14% | ||
| PM (TTM) | 18.75% | ||
| GM | 57.76% |
OM growth 3Y-12.71%
OM growth 5Y-3.46%
PM growth 3Y-12.6%
PM growth 5Y-4.86%
GM growth 3Y0.12%
GM growth 5Y-0.23%
2. Health
2.1 Basic Checks
TER 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 TER has been reduced compared to 1 year ago.
Compared to 5 years ago, TER has less shares outstanding
There is no outstanding debt for TER. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
2.2 Solvency
TER has an Altman-Z score of 17.54. This indicates that TER is financially healthy and has little risk of bankruptcy at the moment.
TER has a better Altman-Z score (17.54) than 85.19% of its industry peers.
There is no outstanding debt for TER. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Altman-Z | 17.54 |
ROIC/WACC0.95
WACC14.74%
2.3 Liquidity
A Current Ratio of 3.09 indicates that TER has no problem at all paying its short term obligations.
The Current ratio of TER (3.09) is comparable to the rest of the industry.
A Quick Ratio of 2.59 indicates that TER has no problem at all paying its short term obligations.
TER has a Quick ratio of 2.59. This is comparable to the rest of the industry: TER outperforms 58.33% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.09 | ||
| Quick Ratio | 2.59 |
3. Growth
3.1 Past
The earnings per share for TER have decreased by 0.00% in the last year.
Measured over the past 5 years, TER shows a small growth in Earnings Per Share. The EPS has been growing by 4.25% on average per year.
The Revenue has been growing slightly by 0.00% in the past year.
TER shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 4.96% yearly.
EPS 1Y (TTM)0%
EPS 3Y-14.02%
EPS 5Y4.25%
EPS Q2Q%12.5%
Revenue 1Y (TTM)0%
Revenue growth 3Y-5%
Revenue growth 5Y4.96%
Sales Q2Q%4.77%
3.2 Future
The Earnings Per Share is expected to grow by 22.18% on average over the next years. This is a very strong growth
TER is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 11.63% yearly.
EPS Next Y9.44%
EPS Next 2Y21.37%
EPS Next 3Y28.28%
EPS Next 5Y22.18%
Revenue Next Year4.69%
Revenue Next 2Y11.87%
Revenue Next 3Y14.9%
Revenue Next 5Y11.63%
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 accelerating.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 43.24, which means the current valuation is very expensive for TER.
TER's Price/Earnings ratio is in line with the industry average.
Compared to an average S&P500 Price/Earnings ratio of 28.29, TER is valued quite expensively.
TER is valuated quite expensively with a Price/Forward Earnings ratio of 30.65.
Compared to the rest of the industry, the Price/Forward Earnings ratio of TER is on the same level as its industry peers.
Compared to an average S&P500 Price/Forward Earnings ratio of 24.44, TER is valued a bit more expensive.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 43.24 | ||
| Fwd PE | 30.65 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of TER is on the same level as its industry peers.
TER's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. TER is cheaper than 68.52% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 47.53 | ||
| EV/EBITDA | 34.26 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of TER may justify a higher PE ratio.
A more expensive valuation may be justified as TER's earnings are expected to grow with 28.28% in the coming years.
PEG (NY)4.58
PEG (5Y)10.18
EPS Next 2Y21.37%
EPS Next 3Y28.28%
5. Dividend
5.1 Amount
TER has a yearly dividend return of 0.35%, which is pretty low.
Compared to an average industry Dividend Yield of 2.28, TER pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.28, TER's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.35% |
5.2 History
The dividend of TER has a limited annual growth rate of 3.94%.
TER has paid a dividend for at least 10 years, which is a reliable track record.
TER has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)3.94%
Div Incr Years1
Div Non Decr Years10
5.3 Sustainability
14.37% of the earnings are spent on dividend by TER. This is a low number and sustainable payout ratio.
TER's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP14.37%
EPS Next 2Y21.37%
EPS Next 3Y28.28%
TERADYNE INC
NASDAQ:TER (1/21/2025, 8:00:02 PM)
After market: 132.987 +0.69 (+0.52%)132.3
-6.1 (-4.41%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners102.32%
Inst Owner Change0.54%
Ins Owners0.14%
Ins Owner Change-2.11%
Market Cap21.55B
Analysts73.91
Price Target137.2 (3.7%)
Short Float %4.32%
Short Ratio2.91
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.35% |
Yearly Dividend0.44
Dividend Growth(5Y)3.94%
DP14.37%
Div Incr Years1
Div Non Decr Years10
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)12.19%
Min EPS beat(2)10.81%
Max EPS beat(2)13.57%
EPS beat(4)4
Avg EPS beat(4)22.17%
Min EPS beat(4)9.94%
Max EPS beat(4)54.36%
EPS beat(8)8
Avg EPS beat(8)20.42%
EPS beat(12)12
Avg EPS beat(12)16.09%
EPS beat(16)16
Avg EPS beat(16)13.98%
Revenue beat(2)2
Avg Revenue beat(2)2.48%
Min Revenue beat(2)1.9%
Max Revenue beat(2)3.06%
Revenue beat(4)3
Avg Revenue beat(4)2.06%
Min Revenue beat(4)-1.59%
Max Revenue beat(4)4.87%
Revenue beat(8)7
Avg Revenue beat(8)2.14%
Revenue beat(12)11
Avg Revenue beat(12)1.8%
Revenue beat(16)15
Avg Revenue beat(16)1.85%
PT rev (1m)1.49%
PT rev (3m)-5.55%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-7.45%
EPS NY rev (1m)0%
EPS NY rev (3m)5.01%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-2.27%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.85%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 43.24 | ||
| Fwd PE | 30.65 | ||
| P/S | 7.87 | ||
| P/FCF | 47.53 | ||
| P/OCF | 33.75 | ||
| P/B | 7.42 | ||
| P/tB | 8.75 | ||
| EV/EBITDA | 34.26 |
EPS(TTM)3.06
EY2.31%
EPS(NY)4.32
Fwd EY3.26%
FCF(TTM)2.78
FCFY2.1%
OCF(TTM)3.92
OCFY2.96%
SpS16.81
BVpS17.82
TBVpS15.12
PEG (NY)4.58
PEG (5Y)10.18
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.61% | ||
| ROE | 17.68% | ||
| ROCE | 16.51% | ||
| ROIC | 14.07% | ||
| ROICexc | 17.03% | ||
| ROICexgc | 20.47% | ||
| OM | 19.14% | ||
| PM (TTM) | 18.75% | ||
| GM | 57.76% | ||
| FCFM | 16.56% |
ROA(3y)19.98%
ROA(5y)19.64%
ROE(3y)28.84%
ROE(5y)30.72%
ROIC(3y)25.46%
ROIC(5y)24.68%
ROICexc(3y)41.36%
ROICexc(5y)42.04%
ROICexgc(3y)57%
ROICexgc(5y)62.09%
ROCE(3y)29.86%
ROCE(5y)28.94%
ROICexcg growth 3Y-29.4%
ROICexcg growth 5Y-16.09%
ROICexc growth 3Y-24.5%
ROICexc growth 5Y-9.94%
OM growth 3Y-12.71%
OM growth 5Y-3.46%
PM growth 3Y-12.6%
PM growth 5Y-4.86%
GM growth 3Y0.12%
GM growth 5Y-0.23%
F-Score6
Asset Turnover0.73
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 158.76% | ||
| Cap/Sales | 6.76% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 99.65% | ||
| Profit Quality | 88.34% | ||
| Current Ratio | 3.09 | ||
| Quick Ratio | 2.59 | ||
| Altman-Z | 17.54 |
F-Score6
WACC14.74%
ROIC/WACC0.95
Cap/Depr(3y)132.35%
Cap/Depr(5y)130.93%
Cap/Sales(3y)4.91%
Cap/Sales(5y)5.3%
Profit Quality(3y)82.66%
Profit Quality(5y)86.05%
High Growth Momentum
Growth
EPS 1Y (TTM)0%
EPS 3Y-14.02%
EPS 5Y4.25%
EPS Q2Q%12.5%
EPS Next Y9.44%
EPS Next 2Y21.37%
EPS Next 3Y28.28%
EPS Next 5Y22.18%
Revenue 1Y (TTM)0%
Revenue growth 3Y-5%
Revenue growth 5Y4.96%
Sales Q2Q%4.77%
Revenue Next Year4.69%
Revenue Next 2Y11.87%
Revenue Next 3Y14.9%
Revenue Next 5Y11.63%
EBIT growth 1Y-5.78%
EBIT growth 3Y-17.07%
EBIT growth 5Y1.33%
EBIT Next Year40.03%
EBIT Next 3Y33.87%
EBIT Next 5Y25.36%
FCF growth 1Y-20.16%
FCF growth 3Y-14.62%
FCF growth 5Y3.26%
OCF growth 1Y-12.04%
OCF growth 3Y-12.34%
OCF growth 5Y4.18%