Teradyne (TER) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research
·3-min read

In the latest trading session, Teradyne (TER) closed at $113.74, marking a -0.19% move from the previous day. This change lagged the S&P 500's 0.06% loss on the day. At the same time, the Dow added 0.29%, and the tech-heavy Nasdaq gained 0.23%.

Coming into today, shares of the maker of wireless products, data storage and equipment to test semiconductors had gained 18.89% in the past month. In that same time, the Computer and Technology sector gained 12.9%, while the S&P 500 gained 11.09%.

TER will be looking to display strength as it nears its next earnings release. In that report, analysts expect TER to post earnings of $0.99 per share. This would mark year-over-year growth of 12.5%. Meanwhile, our latest consensus estimate is calling for revenue of $716.55 million, up 9.46% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.49 per share and revenue of $3.08 billion. These totals would mark changes of +56.99% and +34.18%, respectively, from last year.

Any recent changes to analyst estimates for TER should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. TER is holding a Zacks Rank of #2 (Buy) right now.

Digging into valuation, TER currently has a Forward P/E ratio of 25.36. This represents a discount compared to its industry's average Forward P/E of 31.39.

Meanwhile, TER's PEG ratio is currently 1.51. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Electronics - Testing Equipment stocks are, on average, holding a PEG ratio of 3.77 based on yesterday's closing prices.

The Electronics - Testing Equipment industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 215, putting it in the bottom 16% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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