Teradyne, Inc. Common Stock
TER
$0.00
-0.83%
Teradyne is a leading provider of automated test equipment for semiconductors and industrial automation solutions. It is a key player in the semiconductor testing industry, leveraging its expertise to serve chipmakers globally.
TER
Teradyne, Inc. Common Stock
$0.00
Investment Opinion: Should I buy TER Today?
Based on a synthesis of strong fundamentals, positive analyst sentiment, and a premium valuation, the objective assessment is a Hold. The company's excellent operational performance and growth trajectory are compelling, but the current stock price appears to fully reflect this optimism, leaving limited margin for error. New investors may want to wait for a more attractive entry point or clearer signs that earnings growth will sustainably justify the high multiples.
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TER 12-Month Price Forecast
The analysis is neutral due to a clash between exceptional fundamentals and an exceptionally rich valuation. The stock's fate hinges on whether earnings growth can catch up to and support its price. The high beta adds uncertainty, making the path volatile.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Teradyne, Inc. Common Stock's 12-month outlook, with a consensus price target around $0.00 and implied upside of — versus the current price.
Average Target
$0.00
9 analysts
Implied Upside
—
vs. current price
Analyst Count
9
covering this stock
Price Range
$0 - $0
Analyst target range
Wall Street analyst coverage for Teradyne is positive, with recent actions from nine major firms all reiterating Buy, Outperform, or Overweight ratings. Firms including Baird, Goldman Sachs, Citigroup, Evercore ISI, Cantor Fitzgerald, Stifel, and UBS have maintained their bullish stances. However, specific consensus target price and ratings distribution data are not available in the provided inputs.
Bulls vs Bears: TER Investment Factors
Teradyne exhibits strong fundamental growth, profitability, and a solid balance sheet, supported by bullish analyst sentiment. However, these positives are counterbalanced by a premium valuation, high stock volatility, and exposure to the cyclical semiconductor equipment industry. The stock's recent pullback may reflect concerns about its lofty valuation multiples.
Bullish
- Strong Revenue & Earnings Growth: Q4 revenue grew 43.9% YoY. Net income margin expanded to 23.7%.
- Robust Financial Health: Low debt-to-equity (0.12), strong current ratio (1.76), and solid FCF of $450M.
- Positive Analyst Sentiment: Nine major firms maintain Buy/Outperform ratings, indicating strong institutional confidence.
- Dominant Market Position: Leading provider of semiconductor test equipment, a critical and growing industry.
Bearish
- Premium Valuation: Elevated P/E of 54.6 and P/S of 9.5 suggest high growth expectations are priced in.
- High Market Volatility: Beta of 1.80 indicates stock is 80% more volatile than the overall market.
- Cyclical Industry Exposure: Significant revenue tied to semiconductor capex cycles, which can be volatile.
- Recent Price Correction: Stock down 7.4% over past month, underperforming the S&P 500.
TER Technical Analysis
Overall, the stock has exhibited a strong uptrend over the past six months, with a gain of 105.13% from October 2025 to March 2026. The price has more than doubled from its low in the provided data, indicating significant bullish momentum.
In the short term, the stock has experienced volatility. Over the past month, the price declined by 7.36%, underperforming the S&P 500 which fell 5.25%. However, over the past three months, the stock surged 53.16%, significantly outperforming the broader market's decline of 4.63%.
The current price of $296.46 is near the upper end of its 52-week range of $65.77 to $344.92, trading approximately 86% above its 52-week low. The stock's beta of 1.80 indicates it is significantly more volatile than the overall market.
Beta
1.79
1.79x market volatility
Max Drawdown
-38.3%
Largest decline past year
52-Week Range
$66-$345
Price range past year
Annual Return
+270.3%
Cumulative gain past year
| Period | TER Return | S&P 500 |
|---|---|---|
| 1m | +1.8% | -4.3% |
| 3m | +49.2% | -4.0% |
| 6m | +112.6% | -2.0% |
| 1y | +270.3% | +22.2% |
| ytd | +49.2% | -3.8% |
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TER Fundamental Analysis
Revenue and profitability have shown strong year-over-year growth. The most recent quarterly revenue of $1.08 billion represents a 43.9% increase compared to the same quarter a year prior. The net income margin for Q4 2025 was 23.7%, a significant improvement from the 15.5% margin in Q3 2025, indicating expanding profitability.
Financial health appears solid, with a low debt-to-equity ratio of 0.12 and a strong current ratio of 1.76. The company generated $450.4 million in trailing twelve-month free cash flow, providing ample liquidity for operations and shareholder returns.
Operational efficiency is robust, with a return on equity (ROE) of 19.8% and a return on assets (ROA) of 10.8%. The company maintains healthy gross and operating margins of 58.6% and 21.7%, respectively, reflecting efficient cost management.
Quarterly Revenue
$1.1B
2025-12
Revenue YoY Growth
+0.43%
YoY Comparison
Gross Margin
+0.57%
Latest Quarter
Free Cash Flow
$450404999.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is TER Overvalued?
Given the company's positive net income, the primary valuation metric is the trailing P/E ratio, which stands at 54.64. This elevated multiple suggests the market is pricing in high growth expectations. The forward P/E of 35.89 is lower, indicating anticipated earnings growth.
Peer comparison data is not available in the provided inputs. However, the company's price-to-sales ratio of 9.49 and EV/EBITDA of 39.49 also appear elevated, reinforcing a premium valuation relative to its current earnings and cash flow.
PE
54.6x
Latest Quarter
vs. Historical
High-End
5-Year PE Range 16x~67x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
39.5x
Enterprise Value Multiple
Investment Risk Disclosure
The primary risk is valuation. With a trailing P/E of 54.6 and EV/EBITDA of 39.5, TER is priced for near-perfect execution of high growth. Any earnings miss or guidance reduction could trigger a significant multiple contraction. The stock's high beta of 1.80 confirms its sensitivity to market swings, amplifying downside risk during broader sell-offs.
Operational risks include its concentrated exposure to the semiconductor capital equipment cycle. Demand for its test equipment is directly tied to chipmakers' capital expenditure, which can be volatile and subject to global economic conditions, trade policies, and technological shifts. While the industrial automation segment provides some diversification, semiconductor testing remains its core.
Finally, competitive and technological risks persist. The company must continuously innovate to maintain its leadership against rivals. While its strong R&D spending and recent margin expansion are positive signs, failure to keep pace with next-generation chip testing requirements could erode its market position and premium valuation.
FAQ
The key risks are valuation compression, industry cyclicality, and high volatility. The premium P/E ratio is vulnerable if growth slows. As a semiconductor equipment supplier, TER's revenue is tied to chipmakers' capex, which is historically cyclical. Furthermore, the stock's beta of 1.80 means it typically moves 80% more than the market, amplifying losses during downturns. Execution missteps or a broader tech sector slowdown could significantly impact the stock price.
The 12-month outlook is mixed with a neutral base case. The base case (55% probability) sees the stock trading between $280 and $330 as it digests its massive gains, aligning with current valuation multiples. The bull case (25%) could see it challenge $380+ if growth accelerates. The bear case (20%) risks a pullback toward $200-$260 if growth disappoints and its high multiple contracts. The path is highly dependent on earnings trajectory and market sentiment.
Based on traditional metrics, TER appears overvalued. Its trailing P/E of 54.6, P/S of 9.5, and EV/EBITDA of 39.5 are all at premium levels. The forward P/E of 35.9 is lower, reflecting expected earnings growth, but remains elevated. This valuation suggests the market is pricing in continued exceptional performance. Therefore, it is fair to characterize the stock as richly valued, trading on future growth expectations rather than current earnings.
TER is a strong company, but at current prices, it is not an obvious buy. The stock has more than doubled in six months and trades at a high trailing P/E of 54.6, indicating much future success is already priced in. While analyst sentiment is positive and fundamentals are solid, the risk/reward appears balanced to slightly unfavorable for new capital. A Hold rating is more appropriate until valuation becomes more attractive or growth accelerates further.
TER is more suitable for long-term investors who can tolerate high volatility and believe in the multi-year semiconductor growth story. Short-term trading is risky due to the stock's high beta of 1.80, which leads to sharp swings. Long-term holders can potentially ride out cycles and benefit from the company's strong market position, but they must accept that the current valuation leaves the stock susceptible to significant corrections if the growth narrative falters.