TERADYNE INC (TER)
US8807701029 - Common Stock
Overall TER gets a fundamental rating of 7 out of 10. We evaluated TER against 107 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.
TER had a positive operating cash flow in the past year.
In the past 5 years TER has always been profitable.
In the past 5 years TER always reported a positive cash flow from operatings.
1.2 Ratios
TER has a Return On Assets of 12.87%. This is amongst the best in the industry. TER outperforms 81.13% of its industry peers.
The Return On Equity of TER (17.77%) is better than 80.19% of its industry peers.
Looking at the Return On Invested Capital, with a value of 15.75%, TER belongs to the top of the industry, outperforming 86.79% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for TER is significantly above the industry average of 11.07%.
The 3 year average ROIC (25.46%) for TER is well above the current ROIC(15.75%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 12.87% | ||
| ROE | 17.77% | ||
| ROIC | 15.75% |
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
Looking at the Profit Margin, with a value of 16.77%, TER is in the better half of the industry, outperforming 70.75% of the companies in the same industry.
In the last couple of years the Profit Margin of TER has declined.
TER has a better Operating Margin (19.52%) than 73.58% of its industry peers.
In the last couple of years the Operating Margin of TER has declined.
The Gross Margin of TER (57.42%) is better than 77.36% 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 | 19.52% | ||
| PM (TTM) | 16.77% | ||
| GM | 57.42% |
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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), TER is creating value.
The number of shares outstanding for TER has been reduced compared to 1 year ago.
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 12.46. This indicates that TER is financially healthy and has little risk of bankruptcy at the moment.
TER has a Altman-Z score of 12.46. This is amongst the best in the industry. TER outperforms 87.74% 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 | 12.46 |
ROIC/WACC1.35
WACC11.64%
2.3 Liquidity
A Current Ratio of 3.28 indicates that TER has no problem at all paying its short term obligations.
TER has a Current ratio of 3.28. This is comparable to the rest of the industry: TER outperforms 51.89% of its industry peers.
A Quick Ratio of 2.81 indicates that TER has no problem at all paying its short term obligations.
With a decent Quick ratio value of 2.81, TER is doing good in the industry, outperforming 60.38% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.28 | ||
| Quick Ratio | 2.81 |
3. Growth
3.1 Past
The earnings per share for TER have decreased strongly by -31.22% in the last year.
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 -15.17%.
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)-31.22%
EPS 3Y-14.02%
EPS 5Y4.25%
EPS growth Q2Q-14.13%
Revenue 1Y (TTM)-15.17%
Revenue growth 3Y-5%
Revenue growth 5Y4.96%
Revenue growth Q2Q-8.37%
3.2 Future
The Earnings Per Share is expected to grow by 30.41% on average over the next years. This is a very strong growth
The Revenue is expected to grow by 16.19% on average over the next years. This is quite good.
EPS Next Y0.88%
EPS Next 2Y26.63%
EPS Next 3Y26.51%
EPS Next 5Y30.41%
Revenue Next Year1.48%
Revenue Next 2Y11.42%
Revenue Next 3Y12.63%
Revenue Next 5Y16.19%
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
Based on the Price/Earnings ratio of 38.98, the valuation of TER can be described as expensive.
TER's Price/Earnings is on the same level as the industry average.
TER is valuated expensively when we compare the Price/Earnings ratio to 25.20, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 38.64, the valuation of TER can be described as expensive.
TER's Price/Forward Earnings is on the same level as the industry average.
The average S&P500 Price/Forward Earnings ratio is at 21.63. TER is valued rather expensively when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 38.98 | ||
| Fwd PE | 38.64 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, TER is valued a bit cheaper than 63.21% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, TER is valued a bit cheaper than the industry average as 70.75% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 41.05 | ||
| EV/EBITDA | 24.92 |
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.
TER's earnings are expected to grow with 26.50% in the coming years. This may justify a more expensive valuation.
PEG (NY)44.16
PEG (5Y)9.18
EPS Next 2Y26.63%
EPS Next 3Y26.51%
5. Dividend
5.1 Amount
With a yearly dividend of 0.48%, TER is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 2.10, TER pays a bit more dividend than its industry peers.
With a Dividend Yield of 0.48, TER pays less dividend than the S&P500 average, which is at 2.44.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.48% |
5.2 History
The dividend of TER has a limited annual growth rate of 3.94%.
TER has been paying a dividend for at least 10 years, so it has a reliable track record.
TER has not decreased its dividend in the past 5 years, so it has a somewhat stable track record.
Dividend Growth(5Y)3.94%
Div Incr Years0
Div Non Decr Years9
5.3 Sustainability
TER pays out 15.13% 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.
DP15.13%
EPS Next 2Y26.63%
EPS Next 3Y26.51%
TERADYNE INC
NASDAQ:TER (4/26/2024, 1:33:10 PM)
114.22
+5.31 (+4.88%)
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 Cap17.47B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.48% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
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EPS NY rev (3m)
Revenue NQ rev (1m)
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 38.98 | ||
| Fwd PE | 38.64 | ||
| 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)44.16
PEG (5Y)9.18
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 12.87% | ||
| ROE | 17.77% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 19.52% | ||
| PM (TTM) | 16.77% | ||
| GM | 57.42% | ||
| 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 Turnover0.77
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 3.28 | ||
| Quick Ratio | 2.81 | ||
| 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)-31.22%
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)-15.17%
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
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