TERADYNE INC (TER) Stock Fundamental Analysis
USA - NASDAQ:TER - US8807701029 - Common Stock
141.03 USD
+4.06 (+2.96%)
142.66 USD
+1.63 (+1.16%)
We assign a fundamental rating of 6 out of 10 to TER. TER was compared to 112 industry peers in the Semiconductors & Semiconductor Equipment industry. TER scores excellent points on both the profitability and health parts. This is a solid base for a good stock. TER has a correct valuation and a medium 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
With an excellent Return On Assets value of 12.47%, TER belongs to the best of the industry, outperforming 83.93% of the companies in the same industry.
TER's Return On Equity of 16.54% is amongst the best of the industry. TER outperforms 83.04% of its industry peers.
Looking at the Return On Invested Capital, with a value of 15.46%, TER belongs to the top of the industry, outperforming 88.39% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for TER is significantly above the industry average of 10.94%.
The last Return On Invested Capital (15.46%) for TER is well below the 3 year average (19.67%), which needs to be investigated, but indicates that TER had better years and this may not be a problem.
| 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
Looking at the Profit Margin, with a value of 16.59%, TER is in the better half of the industry, outperforming 75.89% 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 Operating Margin of 19.22%. This is in the better half of the industry: TER outperforms 79.46% of its industry peers.
TER's Operating Margin has declined in the last couple of years.
TER has a better Gross Margin (59.14%) than 83.93% of its industry peers.
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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), TER is creating some value.
TER has more shares outstanding than it did 1 year ago.
TER has less shares outstanding than it did 5 years ago.
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
An Altman-Z score of 16.39 indicates that TER is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 16.39, TER belongs to the top of the industry, outperforming 83.04% 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 | 16.39 |
ROIC/WACC1.34
WACC11.55%
2.3 Liquidity
A Current Ratio of 2.35 indicates that TER has no problem at all paying its short term obligations.
The Current ratio of TER (2.35) is worse than 63.39% 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.
TER has a Quick ratio of 1.83. This is comparable to the rest of the industry: TER outperforms 42.86% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.35 | ||
| Quick Ratio | 1.83 |
3. Growth
3.1 Past
TER shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 7.09%.
TER shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 2.47% yearly.
TER shows a small growth in Revenue. In the last year, the Revenue has grown by 4.57%.
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 19.26% on average per year.
The Revenue is expected to grow by 10.48% on average over the next years. This is quite good.
EPS Next Y-1.88%
EPS Next 2Y19.07%
EPS Next 3Y21.08%
EPS Next 5Y19.26%
Revenue Next Year3.03%
Revenue Next 2Y10.74%
Revenue Next 3Y12%
Revenue Next 5Y10.48%
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
A Price/Earnings ratio of 44.49 indicates a quite expensive valuation of TER.
TER's Price/Earnings ratio is a bit cheaper when compared to the industry. TER is cheaper than 60.71% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 27.53. TER is valued rather expensively when compared to this.
The Price/Forward Earnings ratio is 30.89, which means the current valuation is very expensive for TER.
Based on the Price/Forward Earnings ratio, TER is valued a bit cheaper than the industry average as 61.61% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of TER to the average of the S&P500 Index (23.04), we can say TER is valued slightly more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 44.49 | ||
| Fwd PE | 30.89 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of TER indicates a somewhat cheap valuation: TER is cheaper than 64.29% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, TER is valued a bit cheaper than the industry average as 72.32% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 39.43 | ||
| EV/EBITDA | 33.05 |
4.3 Compensation for Growth
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 21.08% in the coming years.
PEG (NY)N/A
PEG (5Y)18
EPS Next 2Y19.07%
EPS Next 3Y21.08%
5. Dividend
5.1 Amount
TER has a yearly dividend return of 0.33%, which is pretty low.
Compared to an average industry Dividend Yield of 2.15, TER pays a bit more dividend than its industry peers.
With a Dividend Yield of 0.33, TER pays less dividend than the S&P500 average, which is at 2.40.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.33% |
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 2Y19.07%
EPS Next 3Y21.08%
141.03
+4.06 (+2.96%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners104.22%
Inst Owner Change-0.67%
Ins Owners0.18%
Ins Owner Change1.88%
Market Cap22.43B
Analysts70.91
Price Target122.21 (-13.34%)
Short Float %6.66%
Short Ratio2.47
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.33% |
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)3.87%
PT rev (3m)22.24%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-11.41%
EPS NY rev (1m)0.62%
EPS NY rev (3m)-2.32%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-1.77%
Revenue NY rev (1m)0.03%
Revenue NY rev (3m)-0.24%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 44.49 | ||
| Fwd PE | 30.89 | ||
| P/S | 7.93 | ||
| P/FCF | 39.43 | ||
| P/OCF | 28.31 | ||
| P/B | 7.91 | ||
| P/tB | 9.93 | ||
| EV/EBITDA | 33.05 |
EPS(TTM)3.17
EY2.25%
EPS(NY)4.57
Fwd EY3.24%
FCF(TTM)3.58
FCFY2.54%
OCF(TTM)4.98
OCFY3.53%
SpS17.78
BVpS17.84
TBVpS14.2
PEG (NY)N/A
PEG (5Y)18
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 | 16.39 |
F-Score7
WACC11.55%
ROIC/WACC1.34
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 Y-1.88%
EPS Next 2Y19.07%
EPS Next 3Y21.08%
EPS Next 5Y19.26%
Revenue 1Y (TTM)4.57%
Revenue growth 3Y-8.68%
Revenue growth 5Y4.21%
Sales Q2Q%-10.7%
Revenue Next Year3.03%
Revenue Next 2Y10.74%
Revenue Next 3Y12%
Revenue Next 5Y10.48%
EBIT growth 1Y4.88%
EBIT growth 3Y-23.01%
EBIT growth 5Y0.38%
EBIT Next Year21.62%
EBIT Next 3Y25.87%
EBIT Next 5Y23.17%
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%