Teradyne (TER) Stock Sinks As Market Gains: What You Should Know

Zacks Equity Research
·3-min read

Teradyne (TER) closed the most recent trading day at $113.90, moving -0.06% from the previous trading session. This change lagged the S&P 500's daily gain of 1.95%. Elsewhere, the Dow gained 1.85%, while the tech-heavy Nasdaq added 1.55%.

Coming into today, shares of the maker of wireless products, data storage and equipment to test semiconductors had lost 9.2% in the past month. In that same time, the Computer and Technology sector lost 6.69%, while the S&P 500 lost 2.45%.

TER will be looking to display strength as it nears its next earnings release. In that report, analysts expect TER to post earnings of $1.04 per share. This would mark year-over-year growth of 4%. Meanwhile, our latest consensus estimate is calling for revenue of $759.56 million, up 7.84% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.87 per share and revenue of $3.31 billion. These totals would mark changes of +5.41% and +6.07%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for TER. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. TER is currently a Zacks Rank #3 (Hold).

Investors should also note TER's current valuation metrics, including its Forward P/E ratio of 23.42. Its industry sports an average Forward P/E of 28.11, so we one might conclude that TER is trading at a discount comparatively.

Investors should also note that TER has a PEG ratio of 2.12 right now. 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. TER's industry had an average PEG ratio of 3.26 as of yesterday's close.

The Electronics - Testing Equipment industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 48, putting it in the top 19% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

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