TERADYNE INC (TER) Stock Fundamental Analysis
NASDAQ:TER - Nasdaq - US8807701029 - Common Stock - Currency: USD
We assign a fundamental rating of 7 out of 10 to TER. TER was compared to 110 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 not valued too expensively and it also shows a decent growth rate. This makes TER very considerable 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.
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
The Return On Assets of TER (15.57%) is better than 89.09% of its industry peers.
TER has a better Return On Equity (20.63%) than 86.36% of its industry peers.
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.
TER had an Average Return On Invested Capital over the past 3 years of 19.67%. This is significantly above the industry average of 10.57%.
| 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
With an excellent Profit Margin value of 19.86%, TER belongs to the best 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.
Looking at the Operating Margin, with a value of 20.83%, TER belongs to the top of the industry, outperforming 80.91% of the companies in the same industry.
In the last couple of years the Operating Margin of TER has declined.
Looking at the Gross Margin, with a value of 59.36%, TER belongs to the top of the industry, outperforming 85.45% of the companies in the same industry.
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 | 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
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 11.42. This indicates that TER is financially healthy and has little risk of bankruptcy at the moment.
TER's Altman-Z score of 11.42 is amongst the best of the industry. TER outperforms 84.55% of its industry peers.
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 | 11.42 |
ROIC/WACC1.54
WACC11.26%
2.3 Liquidity
TER has a Current Ratio of 2.70. This indicates that TER is financially healthy and has no problem in meeting 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.
The Quick ratio of TER (2.17) is comparable to the rest of the 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.
The Revenue has grown by 9.30% in the past year. This is quite good.
The Revenue has been growing slightly by 4.21% on average over the past years.
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
Based on estimates for the next years, TER will show a quite strong growth in Earnings Per Share. The EPS will grow by 18.66% on average per year.
TER is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 10.63% yearly.
EPS Next Y0.4%
EPS Next 2Y19.41%
EPS Next 3Y21.06%
EPS Next 5Y18.66%
Revenue Next Year3.17%
Revenue Next 2Y10.63%
Revenue Next 3Y12.13%
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.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
TER is valuated quite expensively with a Price/Earnings ratio of 25.08.
68.18% of the companies in the same industry are more expensive than TER, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of TER to the average of the S&P500 Index (26.59), we can say TER is valued inline with the index average.
A Price/Forward Earnings ratio of 18.90 indicates a rather expensive valuation of TER.
Based on the Price/Forward Earnings ratio, TER is valued a bit cheaper than 67.27% of the companies in the same industry.
TER is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 22.39, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.08 | ||
| Fwd PE | 18.9 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, TER is valued a bit cheaper than the industry average as 70.91% of the companies are valued more expensively.
TER's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. TER is cheaper than 79.09% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 22.88 | ||
| EV/EBITDA | 18.82 |
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 21.06% in the coming years.
PEG (NY)62.08
PEG (5Y)10.15
EPS Next 2Y19.41%
EPS Next 3Y21.06%
5. Dividend
5.1 Amount
With a yearly dividend of 0.59%, TER is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 2.61, TER pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.39, TER's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.59% |
5.2 History
The dividend of TER is nicely growing with an annual growth rate of 6.27%!
TER has been paying a dividend for at least 10 years, so it has 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 2Y19.41%
EPS Next 3Y21.06%
86.79
-1.91 (-2.15%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners101.1%
Inst Owner Change-1.61%
Ins Owners0.15%
Ins Owner Change3.21%
Market Cap13.92B
Analysts72.38
Price Target99.97 (15.19%)
Short Float %4.48%
Short Ratio2.1
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.59% |
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)-4.18%
PT rev (3m)-27.72%
EPS NQ rev (1m)1.9%
EPS NQ rev (3m)-30.65%
EPS NY rev (1m)-4.7%
EPS NY rev (3m)-18.57%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-11.74%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-10.19%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.08 | ||
| Fwd PE | 18.9 | ||
| P/S | 4.79 | ||
| P/FCF | 22.88 | ||
| P/OCF | 16.84 | ||
| P/B | 4.98 | ||
| P/tB | 5.87 | ||
| EV/EBITDA | 18.82 |
EPS(TTM)3.46
EY3.99%
EPS(NY)4.59
Fwd EY5.29%
FCF(TTM)3.79
FCFY4.37%
OCF(TTM)5.15
OCFY5.94%
SpS18.11
BVpS17.44
TBVpS14.78
PEG (NY)62.08
PEG (5Y)10.15
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 | 11.42 |
F-Score8
WACC11.26%
ROIC/WACC1.54
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 Y0.4%
EPS Next 2Y19.41%
EPS Next 3Y21.06%
EPS Next 5Y18.66%
Revenue 1Y (TTM)9.3%
Revenue growth 3Y-8.68%
Revenue growth 5Y4.21%
Sales Q2Q%14.31%
Revenue Next Year3.17%
Revenue Next 2Y10.63%
Revenue Next 3Y12.13%
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%