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. Both the health and profitability get an excellent rating, making TER a very profitable company, without any liquidiy or solvency issues. TER has a correct valuation and a medium growth rate. These ratings would make TER suitable 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.
TER had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
TER has a better Return On Assets (12.47%) than 84.55% of its industry peers.
With an excellent Return On Equity value of 16.54%, TER belongs to the best of the industry, outperforming 82.73% of the companies in the same industry.
TER has a better Return On Invested Capital (15.46%) than 89.09% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for TER is significantly above the industry average of 10.87%.
The 3 year average ROIC (19.67%) for TER is well above the current ROIC(15.46%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 12.47% | ||
| ROE | 16.54% | ||
| ROIC | 15.46% |
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
The Profit Margin of TER (16.59%) is better than 76.36% of its industry peers.
In the last couple of years the Profit Margin of TER has remained more or less at the same level.
With a decent Operating Margin value of 19.22%, TER is doing good in the industry, outperforming 78.18% of the companies in the same industry.
TER's Operating Margin has declined in the last couple of years.
Looking at the Gross Margin, with a value of 59.14%, TER belongs to the top of the industry, outperforming 84.55% of the companies in the same industry.
TER's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.22% | ||
| PM (TTM) | 16.59% | ||
| GM | 59.14% |
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
TER has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
The number of shares outstanding for TER has been increased compared to 1 year ago.
TER has less shares outstanding than it did 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 13.45. This indicates that TER is financially healthy and has little risk of bankruptcy at the moment.
TER has a better Altman-Z score (13.45) than 84.55% of its industry peers.
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.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Altman-Z | 13.45 |
ROIC/WACC1.35
WACC11.42%
2.3 Liquidity
TER has a Current Ratio of 2.35. This indicates that TER is financially healthy and has no problem in meeting its short term obligations.
The Current ratio of TER (2.35) is worse than 66.36% of its industry peers.
TER has a Quick Ratio of 1.83. This is a normal value and indicates that TER is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 1.83, TER is doing worse than 60.00% of the companies in the same industry.
The current and quick ratio evaluation for TER is rather negative, while it does have excellent solvency and profitability. These ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.35 | ||
| Quick Ratio | 1.83 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 7.09% over the past year.
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 been growing slightly by 4.57% in the past year.
Measured over the past years, TER shows a small growth in Revenue. The Revenue has been growing by 4.21% on average per year.
EPS 1Y (TTM)7.09%
EPS 3Y-18.64%
EPS 5Y2.47%
EPS Q2Q%-33.72%
Revenue 1Y (TTM)4.57%
Revenue growth 3Y-8.68%
Revenue growth 5Y4.21%
Sales Q2Q%-10.7%
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.
Based on estimates for the next years, TER will show a quite strong growth in Revenue. The Revenue will grow by 10.63% on average per year.
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
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
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
A Price/Earnings ratio of 35.97 indicates a quite expensive valuation of TER.
Based on the Price/Earnings ratio, TER is valued a bit cheaper than the industry average as 60.91% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 27.11, TER is valued a bit more expensive.
The Price/Forward Earnings ratio is 24.93, which indicates a rather expensive current valuation of TER.
60.91% of the companies in the same industry are more expensive than TER, based on the Price/Forward Earnings ratio.
TER's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 35.78.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 35.97 | ||
| Fwd PE | 24.93 |
4.2 Price Multiples
TER's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. TER is cheaper than 61.82% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, TER is valued a bit cheaper than 72.73% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 32.15 | ||
| EV/EBITDA | 26.27 |
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.
TER's earnings are expected to grow with 20.39% in the coming years. This may justify a more expensive valuation.
PEG (NY)78.91
PEG (5Y)14.55
EPS Next 2Y19.18%
EPS Next 3Y20.39%
5. Dividend
5.1 Amount
With a yearly dividend of 0.45%, TER is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 2.47, TER pays a bit more dividend than its industry peers.
With a Dividend Yield of 0.45, TER pays less dividend than the S&P500 average, which is at 2.39.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.45% |
5.2 History
On average, the dividend of TER grows each year by 6.27%, which is quite nice.
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
TER pays out 16.55% 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.
DP16.55%
EPS Next 2Y19.18%
EPS Next 3Y20.39%
114.01
+2.38 (+2.13%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners99.76%
Inst Owner Change-0.15%
Ins Owners0.18%
Ins Owner Change2.19%
Market Cap18.29B
Analysts71.82
Price Target115.95 (1.7%)
Short Float %4.97%
Short Ratio2.5
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.45% |
Yearly Dividend0.49
Dividend Growth(5Y)6.27%
DP16.55%
Div Incr Years1
Div Non Decr Years10
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)12.49%
Min EPS beat(2)4.95%
Max EPS beat(2)20.03%
EPS beat(4)4
Avg EPS beat(4)10.49%
Min EPS beat(4)3.4%
Max EPS beat(4)20.03%
EPS beat(8)8
Avg EPS beat(8)15.7%
EPS beat(12)12
Avg EPS beat(12)16.78%
EPS beat(16)16
Avg EPS beat(16)14.46%
Revenue beat(2)0
Avg Revenue beat(2)-0.47%
Min Revenue beat(2)-0.7%
Max Revenue beat(2)-0.24%
Revenue beat(4)2
Avg Revenue beat(4)0.4%
Min Revenue beat(4)-0.7%
Max Revenue beat(4)1.9%
Revenue beat(8)5
Avg Revenue beat(8)1.21%
Revenue beat(12)9
Avg Revenue beat(12)1.59%
Revenue beat(16)13
Avg Revenue beat(16)1.39%
PT rev (1m)15.98%
PT rev (3m)11.13%
EPS NQ rev (1m)-9.75%
EPS NQ rev (3m)-34.59%
EPS NY rev (1m)0%
EPS NY rev (3m)-4.65%
Revenue NQ rev (1m)-1.36%
Revenue NQ rev (3m)-16.16%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.1%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 35.97 | ||
| Fwd PE | 24.93 | ||
| P/S | 6.47 | ||
| P/FCF | 32.15 | ||
| P/OCF | 23.08 | ||
| P/B | 6.45 | ||
| P/tB | 8.1 | ||
| EV/EBITDA | 26.27 |
EPS(TTM)3.17
EY2.78%
EPS(NY)4.57
Fwd EY4.01%
FCF(TTM)3.55
FCFY3.11%
OCF(TTM)4.94
OCFY4.33%
SpS17.63
BVpS17.69
TBVpS14.08
PEG (NY)78.91
PEG (5Y)14.55
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 12.47% | ||
| ROE | 16.54% | ||
| ROCE | 17.61% | ||
| ROIC | 15.46% | ||
| ROICexc | 17.56% | ||
| ROICexgc | 22.3% | ||
| OM | 19.22% | ||
| PM (TTM) | 16.59% | ||
| GM | 59.14% | ||
| FCFM | 20.12% |
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-Score7
Asset Turnover0.75
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 181.67% | ||
| Cap/Sales | 7.91% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 118.88% | ||
| Profit Quality | 121.26% | ||
| Current Ratio | 2.35 | ||
| Quick Ratio | 1.83 | ||
| Altman-Z | 13.45 |
F-Score7
WACC11.42%
ROIC/WACC1.35
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)7.09%
EPS 3Y-18.64%
EPS 5Y2.47%
EPS Q2Q%-33.72%
EPS Next Y0.46%
EPS Next 2Y19.18%
EPS Next 3Y20.39%
EPS Next 5Y18.66%
Revenue 1Y (TTM)4.57%
Revenue growth 3Y-8.68%
Revenue growth 5Y4.21%
Sales Q2Q%-10.7%
Revenue Next Year3.28%
Revenue Next 2Y10.63%
Revenue Next 3Y11.9%
Revenue Next 5Y10.63%
EBIT growth 1Y4.88%
EBIT growth 3Y-23.01%
EBIT growth 5Y0.38%
EBIT Next Year21.07%
EBIT Next 3Y25.03%
EBIT Next 5Y22.87%
FCF growth 1Y22.9%
FCF growth 3Y-21.12%
FCF growth 5Y1.31%
OCF growth 1Y28.43%
OCF growth 3Y-15.1%
OCF growth 5Y3.04%