TERADYNE INC (TER)
US8807701029 - Common Stock
We assign a fundamental rating of 6 out of 10 to TER. TER was compared to 107 industry peers in the Semiconductors & Semiconductor Equipment industry. TER gets an excellent profitability rating and is at the same time showing great financial health properties. While showing a medium growth rate, TER is valued expensive at the moment. This makes TER very considerable for quality investing!
1. Profitability
1.1 Basic Checks
TER had positive earnings in the past year.
In the past year TER had a positive cash flow from operations.
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
With an excellent Return On Assets value of 12.59%, TER belongs to the best of the industry, outperforming 81.31% of the companies in the same industry.
TER has a Return On Equity of 16.79%. This is in the better half of the industry: TER outperforms 78.50% of its industry peers.
The Return On Invested Capital of TER (15.21%) is better than 84.11% of its industry peers.
TER had an Average Return On Invested Capital over the past 3 years of 25.46%. This is significantly above the industry average of 10.73%.
The 3 year average ROIC (25.46%) for TER is well above the current ROIC(15.21%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 12.59% | ||
| ROE | 16.79% | ||
| ROIC | 15.21% |
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
With a decent Profit Margin value of 16.15%, TER is doing good in the industry, outperforming 73.83% of the companies in the same industry.
In the last couple of years the Profit Margin of TER has declined.
TER has a Operating Margin of 19.17%. This is in the better half of the industry: TER outperforms 73.83% of its industry peers.
In the last couple of years the Operating Margin of TER has declined.
TER has a Gross Margin of 57.16%. This is in the better half of the industry: TER outperforms 78.50% of its industry peers.
In the last couple of years the Gross Margin of TER has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.17% | ||
| PM (TTM) | 16.15% | ||
| GM | 57.16% |
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 well above the Cost of Capital (WACC), which means it is creating value.
Compared to 1 year ago, TER has less shares outstanding
Compared to 5 years ago, TER has less shares outstanding
TER has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
2.2 Solvency
TER has an Altman-Z score of 16.30. This indicates that TER is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 16.30, TER belongs to the best of the industry, outperforming 88.78% of the companies in the same industry.
TER has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Altman-Z | 16.3 |
ROIC/WACC1.22
WACC12.49%
2.3 Liquidity
A Current Ratio of 3.73 indicates that TER has no problem at all paying its short term obligations.
TER has a Current ratio of 3.73. This is comparable to the rest of the industry: TER outperforms 58.88% of its industry peers.
TER has a Quick Ratio of 3.16. This indicates that TER is financially healthy and has no problem in meeting its short term obligations.
With a decent Quick ratio value of 3.16, TER is doing good in the industry, outperforming 64.49% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.73 | ||
| Quick Ratio | 3.16 |
3. Growth
3.1 Past
TER shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -24.54%.
TER shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 4.25% yearly.
TER shows a very negative growth in Revenue. In the last year, the Revenue has decreased by -11.89%.
Measured over the past years, TER shows a small growth in Revenue. The Revenue has been growing by 4.96% on average per year.
EPS 1Y (TTM)-24.54%
EPS 3Y-14.02%
EPS 5Y4.25%
EPS growth Q2Q-7.27%
Revenue 1Y (TTM)-11.89%
Revenue growth 3Y-5%
Revenue growth 5Y4.96%
Revenue growth Q2Q-2.87%
3.2 Future
Based on estimates for the next years, TER will show a very strong growth in Earnings Per Share. The EPS will grow by 23.34% on average per year.
The Revenue is expected to grow by 12.41% on average over the next years. This is quite good.
EPS Next Y0.88%
EPS Next 2Y26.63%
EPS Next 3Y26.51%
EPS Next 5Y23.34%
Revenue Next Year1.48%
Revenue Next 2Y11.42%
Revenue Next 3Y12.63%
Revenue Next 5Y12.41%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
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
With a Price/Earnings ratio of 45.64, TER can be considered very expensive at the moment.
The rest of the industry has a similar Price/Earnings ratio as TER.
TER's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 28.60.
A Price/Forward Earnings ratio of 28.08 indicates a quite expensive valuation of TER.
The rest of the industry has a similar Price/Forward Earnings ratio as TER.
TER is valuated rather expensively when we compare the Price/Forward Earnings ratio to 20.15, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 45.64 | ||
| Fwd PE | 28.08 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, TER is valued a bit cheaper than the industry average as 61.68% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, TER is valued a bit cheaper than the industry average as 69.16% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 49.1 | ||
| EV/EBITDA | 31.22 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates TER does not grow enough to justify the current Price/Earnings ratio.
The decent profitability rating of TER may justify a higher PE ratio.
TER's earnings are expected to grow with 26.50% in the coming years. This may justify a more expensive valuation.
PEG (NY)51.7
PEG (5Y)10.75
EPS Next 2Y26.63%
EPS Next 3Y26.51%
5. Dividend
5.1 Amount
TER has a yearly dividend return of 0.37%, which is pretty low.
Compared to an average industry Dividend Yield of 1.83, TER pays a bit more dividend than its industry peers.
With a Dividend Yield of 0.37, TER pays less dividend than the S&P500 average, which is at 2.32.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.37% |
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.
As TER did not decrease their dividend in the past 5 years, we can say the dividend looks stable.
Dividend Growth(5Y)3.94%
Div Incr Years0
Div Non Decr Years9
5.3 Sustainability
TER pays out 16.09% of its income as dividend. This is a sustainable payout ratio.
The dividend of TER is growing, but earnings are growing more, so the dividend growth is sustainable.
DP16.09%
EPS Next 2Y26.63%
EPS Next 3Y26.51%
TERADYNE INC
NASDAQ:TER (5/17/2024, 7:00:01 PM)
After market: 131.91 0 (0%)131.91
+0.42 (+0.32%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap20.18B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.37% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
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EPS beat(8)
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EPS beat(16)
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Revenue beat(2)
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PT rev (1m)
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EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 45.64 | ||
| Fwd PE | 28.08 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)51.7
PEG (5Y)10.75
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 12.59% | ||
| ROE | 16.79% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 19.17% | ||
| PM (TTM) | 16.15% | ||
| GM | 57.16% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.78
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 3.73 | ||
| Quick Ratio | 3.16 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)-24.54%
EPS 3Y-14.02%
EPS 5Y
EPS growth Q2Q
EPS Next Y0.88%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)-11.89%
Revenue growth 3Y-5%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y