TERADYNE INC (TER) Stock Fundamental Analysis
NASDAQ:TER - Nasdaq - US8807701029 - Common Stock - Currency: USD
TER gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 110 industry peers in the Semiconductors & Semiconductor Equipment industry. Both the health and profitability get an excellent rating, making TER a very profitable company, without any liquidiy or solvency issues. TER has a decent growth rate and is not valued too expensively. These ratings could make TER a good candidate for quality investing.
1. Profitability
1.1 Basic Checks
In the past year TER was profitable.
In the past year TER had a positive cash flow from operations.
TER had positive earnings in each of the past 5 years.
Each year in the past 5 years TER had a positive operating cash flow.
1.2 Ratios
TER's Return On Assets of 15.57% is amongst the best of the industry. TER outperforms 89.09% of its industry peers.
With an excellent Return On Equity value of 20.63%, TER belongs to the best of the industry, outperforming 86.36% of the companies in the same industry.
TER has a Return On Invested Capital of 17.39%. This is amongst the best in the industry. TER outperforms 90.91% of its industry peers.
The Average Return On Invested Capital over the past 3 years for TER is significantly above the industry average of 10.68%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 15.57% | ||
| ROE | 20.63% | ||
| ROIC | 17.39% |
ROA(3y)15.98%
ROA(5y)19.21%
ROE(3y)22.06%
ROE(5y)28.25%
ROIC(3y)19.67%
ROIC(5y)24.33%
1.3 Margins
Looking at the Profit Margin, with a value of 19.86%, TER belongs to the top of the industry, outperforming 82.73% of the companies in the same industry.
In the last couple of years the Profit Margin of TER has remained more or less at the same level.
TER has a better Operating Margin (20.83%) than 80.00% of its industry peers.
In the last couple of years the Operating Margin of TER has declined.
The Gross Margin of TER (59.36%) is better than 85.45% of its industry peers.
TER's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 20.83% | ||
| PM (TTM) | 19.86% | ||
| GM | 59.36% |
OM growth 3Y-15.69%
OM growth 5Y-3.67%
PM growth 3Y-11.13%
PM growth 5Y-1.14%
GM growth 3Y-0.63%
GM growth 5Y0.03%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), TER is creating some value.
Compared to 1 year ago, TER has more shares outstanding
The number of shares outstanding for TER has been reduced compared to 5 years ago.
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 11.88. This indicates that TER is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 11.88, TER belongs to the best of the industry, outperforming 81.82% 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 | 11.88 |
ROIC/WACC1.51
WACC11.53%
2.3 Liquidity
A Current Ratio of 2.70 indicates that TER has no problem at all paying its short term obligations.
TER's Current ratio of 2.70 is in line compared to the rest of the industry. TER outperforms 45.45% of its industry peers.
A Quick Ratio of 2.17 indicates that TER has no problem at all paying its short term obligations.
Looking at the Quick ratio, with a value of 2.17, TER is in line with its industry, outperforming 51.82% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.7 | ||
| Quick Ratio | 2.17 |
3. Growth
3.1 Past
TER shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 19.72%, which is quite good.
Measured over the past 5 years, TER shows a small growth in Earnings Per Share. The EPS has been growing by 2.47% on average per year.
Looking at the last year, TER shows a quite strong growth in Revenue. The Revenue has grown by 9.30% in the last year.
TER shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 4.21% yearly.
EPS 1Y (TTM)19.72%
EPS 3Y-18.64%
EPS 5Y2.47%
EPS Q2Q%47.06%
Revenue 1Y (TTM)9.3%
Revenue growth 3Y-8.68%
Revenue growth 5Y4.21%
Sales Q2Q%14.31%
3.2 Future
TER is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 18.66% yearly.
The Revenue is expected to grow by 10.63% on average over the next years. This is quite good.
EPS Next Y0.46%
EPS Next 2Y19.18%
EPS Next 3Y20.39%
EPS Next 5Y18.66%
Revenue Next Year3.28%
Revenue Next 2Y10.63%
Revenue Next 3Y11.9%
Revenue Next 5Y10.63%
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
With a Price/Earnings ratio of 26.12, TER can be considered very expensive at the moment.
Based on the Price/Earnings ratio, TER is valued a bit cheaper than the industry average as 69.09% of the companies are valued more expensively.
TER's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.69.
A Price/Forward Earnings ratio of 19.76 indicates a rather expensive valuation of TER.
Based on the Price/Forward Earnings ratio, TER is valued a bit cheaper than the industry average as 70.00% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of TER to the average of the S&P500 Index (37.36), we can say TER is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.12 | ||
| Fwd PE | 19.76 |
4.2 Price Multiples
68.18% of the companies in the same industry are more expensive than TER, based on the Enterprise Value to EBITDA ratio.
78.18% of the companies in the same industry are more expensive than TER, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 23.83 | ||
| EV/EBITDA | 19.78 |
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 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 20.39% in the coming years.
PEG (NY)57.32
PEG (5Y)10.57
EPS Next 2Y19.18%
EPS Next 3Y20.39%
5. Dividend
5.1 Amount
TER has a yearly dividend return of 0.52%, which is pretty low.
TER's Dividend Yield is a higher than the industry average which is at 2.21.
Compared to an average S&P500 Dividend Yield of 2.34, TER's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.52% |
5.2 History
On average, the dividend of TER grows each year by 6.27%, which is quite nice.
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)6.27%
Div Incr Years1
Div Non Decr Years10
5.3 Sustainability
13.42% of the earnings are spent on dividend by TER. This is a low number and sustainable payout ratio.
The dividend of TER is growing, but earnings are growing more, so the dividend growth is sustainable.
DP13.42%
EPS Next 2Y19.18%
EPS Next 3Y20.39%
NASDAQ:TER (7/24/2025, 3:20:05 PM)
90.39
-2.64 (-2.84%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners99.63%
Inst Owner Change-0.35%
Ins Owners0.18%
Ins Owner Change4.37%
Market Cap14.50B
Analysts73.33
Price Target98.47 (8.94%)
Short Float %4.33%
Short Ratio2.22
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.52% |
Yearly Dividend0.49
Dividend Growth(5Y)6.27%
DP13.42%
Div Incr Years1
Div Non Decr Years10
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)11.72%
Min EPS beat(2)3.4%
Max EPS beat(2)20.03%
EPS beat(4)4
Avg EPS beat(4)11.96%
Min EPS beat(4)3.4%
Max EPS beat(4)20.03%
EPS beat(8)8
Avg EPS beat(8)17.43%
EPS beat(12)12
Avg EPS beat(12)16.78%
EPS beat(16)16
Avg EPS beat(16)14.62%
Revenue beat(2)1
Avg Revenue beat(2)0.19%
Min Revenue beat(2)-0.24%
Max Revenue beat(2)0.62%
Revenue beat(4)3
Avg Revenue beat(4)1.34%
Min Revenue beat(4)-0.24%
Max Revenue beat(4)3.06%
Revenue beat(8)6
Avg Revenue beat(8)1.67%
Revenue beat(12)10
Avg Revenue beat(12)1.68%
Revenue beat(16)14
Avg Revenue beat(16)1.5%
PT rev (1m)-1.5%
PT rev (3m)-16.69%
EPS NQ rev (1m)0.16%
EPS NQ rev (3m)2.69%
EPS NY rev (1m)0.05%
EPS NY rev (3m)-4.65%
Revenue NQ rev (1m)0.3%
Revenue NQ rev (3m)1.05%
Revenue NY rev (1m)0.1%
Revenue NY rev (3m)-4.09%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.12 | ||
| Fwd PE | 19.76 | ||
| P/S | 4.99 | ||
| P/FCF | 23.83 | ||
| P/OCF | 17.54 | ||
| P/B | 5.18 | ||
| P/tB | 6.12 | ||
| EV/EBITDA | 19.78 |
EPS(TTM)3.46
EY3.83%
EPS(NY)4.57
Fwd EY5.06%
FCF(TTM)3.79
FCFY4.2%
OCF(TTM)5.15
OCFY5.7%
SpS18.11
BVpS17.44
TBVpS14.78
PEG (NY)57.32
PEG (5Y)10.57
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 15.57% | ||
| ROE | 20.63% | ||
| ROCE | 19.8% | ||
| ROIC | 17.39% | ||
| ROICexc | 20.85% | ||
| ROICexgc | 25.05% | ||
| OM | 20.83% | ||
| PM (TTM) | 19.86% | ||
| GM | 59.36% | ||
| FCFM | 20.94% |
ROA(3y)15.98%
ROA(5y)19.21%
ROE(3y)22.06%
ROE(5y)28.25%
ROIC(3y)19.67%
ROIC(5y)24.33%
ROICexc(3y)27.48%
ROICexc(5y)40.08%
ROICexgc(3y)35.32%
ROICexgc(5y)56.65%
ROCE(3y)22.4%
ROCE(5y)27.7%
ROICexcg growth 3Y-36.99%
ROICexcg growth 5Y-17.13%
ROICexc growth 3Y-32.99%
ROICexc growth 5Y-11.32%
OM growth 3Y-15.69%
OM growth 5Y-3.67%
PM growth 3Y-11.13%
PM growth 5Y-1.14%
GM growth 3Y-0.63%
GM growth 5Y0.03%
F-Score8
Asset Turnover0.78
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 178.88% | ||
| Cap/Sales | 7.51% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 113.65% | ||
| Profit Quality | 105.44% | ||
| Current Ratio | 2.7 | ||
| Quick Ratio | 2.17 | ||
| Altman-Z | 11.88 |
F-Score8
WACC11.53%
ROIC/WACC1.51
Cap/Depr(3y)152.3%
Cap/Depr(5y)141.7%
Cap/Sales(3y)6.05%
Cap/Sales(5y)5.53%
Profit Quality(3y)80.07%
Profit Quality(5y)84.52%
High Growth Momentum
Growth
EPS 1Y (TTM)19.72%
EPS 3Y-18.64%
EPS 5Y2.47%
EPS Q2Q%47.06%
EPS Next Y0.46%
EPS Next 2Y19.18%
EPS Next 3Y20.39%
EPS Next 5Y18.66%
Revenue 1Y (TTM)9.3%
Revenue growth 3Y-8.68%
Revenue growth 5Y4.21%
Sales Q2Q%14.31%
Revenue Next Year3.28%
Revenue Next 2Y10.63%
Revenue Next 3Y11.9%
Revenue Next 5Y10.63%
EBIT growth 1Y18.78%
EBIT growth 3Y-23.01%
EBIT growth 5Y0.38%
EBIT Next Year24.02%
EBIT Next 3Y24.74%
EBIT Next 5Y22.87%
FCF growth 1Y41.79%
FCF growth 3Y-21.12%
FCF growth 5Y1.31%
OCF growth 1Y40.14%
OCF growth 3Y-15.1%
OCF growth 5Y3.04%