Teradata
TDC
$26.23
-23.73%
Teradata Corporation is a cloud analytics and data platform company that helps organizations unify their data, deploy AI, and improve business performance through its VantageCloud and ClearScape Analytics offerings. As a legacy player in data warehousing, Teradata is undergoing a strategic transformation to a cloud-first subscription model, competing with hyperscalers like Snowflake and Databricks. The current investor narrative centers on the company's accelerating cloud revenue growth, margin expansion from its recurring revenue mix, and the potential for AI-driven demand to re-rate the stock after years of transition. Recent quarterly results showing strong free cash flow and a sharp uptick in net income have reignited debate on whether Teradata can sustain its turnaround momentum.…
TDC
Teradata
$26.23
TDC 12-Month Price Forecast
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Teradata's 12-month outlook, with a consensus price target around $35.63 and implied upside of +35.8% versus the current price.
Average Target
$35.63
0 analysts
Implied Upside
+35.8%
vs. current price
Analyst Count
—
covering this stock
Price Range
$28 - $49
Analyst target range
Teradata is covered by 8 analysts, with a consensus recommendation of 'hold' (mean rating 2.75 on a 1-5 scale, where 1 is strong buy). The average target price is $35.50, implying 16.3% upside from the current price of $30.52. The distribution shows 1 buy (Citigroup), 2 market outperform (Citizens), 2 sector perform/neutral (RBC, UBS), and 2 underweight (Barclays), with one unspecified. The consensus leans neutral, reflecting uncertainty about the sustainability of the earnings turnaround. The target range spans from $28.00 (low) to $49.00 (high), a spread of $21.00 or 75% of the current price, indicating high uncertainty. The high target of $49.00 assumes successful cloud migration and margin expansion, while the low target of $28.00 prices in competitive pressure from Snowflake/Databricks and potential revenue deceleration. Recent ratings show no changes in the past two months, with Barclays maintaining underweight and Citigroup holding buy, suggesting a stalemate between bulls and bears. The wide spread implies low conviction among analysts, typical for a company in transition.
Bulls vs Bears: TDC Investment Factors
Teradata presents a mixed picture: strong free cash flow, accelerating revenue growth, and an attractive forward valuation are countered by underlying operating losses, high leverage, and competitive threats from cloud-native rivals. The bull case hinges on the successful cloud transition driving sustainable margin expansion and earnings growth, while the bear case focuses on the risk that the reported profitability is non-recurring and competitive pressures will erode market share. The single most important tension is whether the Q1 2026 net income boost is a one-time event or a sign of sustainable earnings power. Currently, the evidence slightly favors the bulls given the strong cash flow and low forward P/E, but the underlying operating loss keeps the risk elevated.
Bullish
- Cloud Revenue Acceleration: Teradata's Q1 2026 revenue grew 6.2% YoY to $444M, accelerating from 2.9% in Q4 2025, driven by recurring revenue now making up 90% of total. This shift to subscription-based cloud revenue improves visibility and supports margin expansion.
- Strong Free Cash Flow Generation: Free cash flow surged to $390M in Q1 2026 from $151M in Q4 2025, and trailing twelve-month FCF reached $679M. This robust cash generation provides financial flexibility for investment and debt reduction.
- Attractive Forward Valuation: With a forward P/E of 10.63x, Teradata trades at a significant discount to the Software-Infrastructure industry average (typically 30-40x). The P/S ratio of 1.73x also suggests the market is not fully valuing its revenue stream.
- Improving Gross Margins: Gross margin improved to 62.2% in Q1 2026 from 60.8% in Q4 2025, reflecting better scale in cloud operations. This trend supports the thesis that the cloud transition is driving operational leverage.
Bearish
- Underlying Operating Loss: Despite reported net income of $335M, operating income was -$36M in Q1 2026 due to a $473M other income item (likely a tax benefit). Excluding this, the company is not profitable on an operating basis, raising sustainability concerns.
- High Debt-to-Equity Ratio: Debt-to-equity stands at 2.44, indicating significant leverage. While cash of $816M provides some cushion, the current ratio of 0.92 suggests short-term liabilities exceed current assets, posing liquidity risk.
- Intense Competitive Pressure: Teradata faces fierce competition from cloud-native platforms like Snowflake and Databricks, which offer more modern architectures. This could limit market share gains and pressure pricing, as reflected in the low P/S ratio.
- Analyst Consensus Hold with Wide Target Range: The consensus recommendation is 'hold' with a mean rating of 2.75. The target price range spans from $28 to $49, indicating high uncertainty. Barclays maintains an underweight rating, reflecting skepticism about the turnaround.
TDC Technical Analysis
Teradata's 1-year price change of +40.0% reflects a sustained uptrend from its 52-week low of $19.83, with the current price of $30.52 sitting at 46.5% of the 52-week range ($19.83–$41.78). This positioning near the midpoint suggests the stock is in a recovery phase but not yet overextended, leaving room for further upside if momentum continues. The 52-week high of $41.78 represents a key resistance level, while the low of $19.83 marks a critical support floor. Short-term momentum shows a 1-month decline of -3.84% and a 3-month gain of +12.62%, indicating a pullback from recent highs after a strong rally from May through early July. The divergence between the 1-month negative trend and the 1-year positive trend could signal a temporary consolidation or profit-taking, rather than a trend reversal, given the stock's beta of 0.591—meaning it is 41% less volatile than the S&P 500, which suggests lower systematic risk. The 52-week high of $41.78 is 36.9% above the current price, while the 52-week low of $19.83 is 35.0% below. A breakout above $41.78 would signal a resumption of the uptrend, while a breakdown below $19.83 would indicate a failure of the recovery. With a beta of 0.591, Teradata is less sensitive to market swings, making it a lower-volatility holding within the tech sector.
Beta
0.59
0.59x market volatility
Max Drawdown
-35.2%
Largest decline past year
52-Week Range
$20-$42
Price range past year
Annual Return
+29.7%
Cumulative gain past year
| Period | TDC Return | S&P 500 |
|---|---|---|
| 1m | -28.0% | +2.5% |
| 3m | -11.5% | +5.2% |
| 6m | -4.5% | +11.5% |
| 1y | +29.7% | +22.6% |
| ytd | -11.7% | +12.9% |
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TDC Fundamental Analysis
Teradata's revenue trajectory is showing moderate growth, with Q1 2026 revenue of $444 million up 6.2% year-over-year, accelerating from the 2.9% growth in Q4 2025 ($421 million) and reversing the slight declines seen in mid-2025. The recurring revenue mix is a key driver: subscription software licenses (recurring) contributed $99 million and services & other recurring added $301 million, together representing 90% of total revenue, while consulting services ($43 million) and perpetual software/hardware ($1 million) are shrinking. This shift to recurring revenue supports visibility and margin expansion. Gross margin improved to 62.2% in Q1 2026 from 60.8% in Q4 2025, reflecting better scale in cloud operations. Net income surged to $335 million in Q1 2026 (net margin 75.5%) from $37 million in Q4 2025 (net margin 8.8%), but this was boosted by a $473 million other income item (likely a tax benefit or asset sale); excluding that, operating income was -$36 million, indicating underlying profitability remains pressured. Operating margin was -8.1% in Q1 2026 versus 12.8% in Q4 2025, highlighting the volatility from non-recurring items. Teradata's balance sheet is solid: free cash flow was $390 million in Q1 2026, up from $151 million in Q4 2025, and the company ended Q1 with $816 million in cash. However, debt-to-equity is elevated at 2.44, and the current ratio of 0.92 suggests short-term liabilities exceed current assets, though strong operating cash flow ($401 million in Q1) provides liquidity. ROE is 56.5%, driven by high leverage, while ROA is 7.4%, indicating efficient asset use.
Quarterly Revenue
$444000000.0B
2026-03
Revenue YoY Growth
+6.2%
YoY Comparison
Gross Margin
62.2%
Latest Quarter
Free Cash Flow
$679000000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is TDC Overvalued?
Since net income is positive ($335 million in Q1 2026), the primary valuation metric is the P/E ratio. The trailing P/E is 22.06x, while the forward P/E is 10.63x, implying the market expects significant earnings growth in the coming year. The gap between trailing and forward P/E suggests that the market is pricing in a sharp earnings recovery, likely from the non-recurring income boost. Compared to the Software - Infrastructure industry average P/E (not provided, but typically around 30-40x for growth peers), Teradata's trailing P/E of 22x appears discounted, but the forward P/E of 10.6x is even more compelling if earnings materialize. The P/S ratio of 1.73x is well below the industry average (often 5-10x for SaaS companies), indicating the market is not fully valuing Teradata's revenue stream. Historically, Teradata's trailing P/E has ranged from 1.78x (Q1 2026) to 97x (Q3 2022), with the current 22x near the lower end of its 5-year band. This suggests the stock is not expensive by its own history, but the low P/E reflects skepticism about earnings sustainability. The PEG ratio of 1.30x implies the stock is reasonably priced relative to its growth rate, though the growth rate used is unclear.
PE
22.1x
Latest Quarter
vs. Historical
Low-End
5-Year PE Range 2x~97x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
11.0x
Enterprise Value Multiple
Investment Risk Disclosure
Financial & Operational Risks: Teradata's reported net income of $335M in Q1 2026 was inflated by a $473M other income item; operating income was -$36M, indicating the core business is not yet profitable. The debt-to-equity ratio of 2.44 is high, and the current ratio of 0.92 suggests potential short-term liquidity stress despite $816M cash. Free cash flow of $390M in Q1 is strong, but reliance on non-recurring items for profitability makes earnings quality a concern. Market & Competitive Risks: Teradata trades at a forward P/E of 10.63x, which is low relative to the industry, but this discount may reflect skepticism about its competitive position against Snowflake and Databricks. With a beta of 0.591, the stock is less volatile than the market, but any macro downturn could still pressure growth stocks. The wide analyst target range ($28-$49) and consensus 'hold' rating indicate high uncertainty. Worst-Case Scenario: If competitive pressures intensify and the cloud transition fails to deliver margin expansion, revenue growth could decelerate and operating losses persist. In this scenario, the stock could fall to its 52-week low of $19.83, representing a 35% decline from the current price of $30.52. This would imply a loss of approximately $10.69 per share, or -35%.