Teradyne
TER
$335.46
-4.11%
Teradyne is a leading supplier of automated test equipment for the semiconductor industry, along with system testing for hard disk drives, circuit boards, and wireless devices, and it also provides collaborative and autonomous robots for factory automation. The company holds a dominant market position in semiconductor test, serving vertically integrated, fabless, and foundry chipmakers, and has expanded into industrial automation since 2015. The current investor narrative centers on Teradyne's pivotal role in the AI-driven semiconductor boom, with surging demand for memory and complex AI chips driving record orders and revenue growth, while concerns about near-term margin pressure and sector cyclicality create debate. Recent news highlights strong Q2 earnings and guidance, inclusion in the Nasdaq-100, and high-profile short bets on the chip sector, underscoring both optimism and caution.…
TER
Teradyne
$335.46
Related headlines
TER 12-Month Price Forecast
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Teradyne's 12-month outlook, with a consensus price target around $446.47 and implied upside of +33.1% versus the current price.
Average Target
$446.47
0 analysts
Implied Upside
+33.1%
vs. current price
Analyst Count
—
covering this stock
Price Range
$350 - $550
Analyst target range
Analyst coverage is robust with 15 analysts providing ratings, and the consensus recommendation is 'Buy' with a mean rating of 1.65 (where 1 is Strong Buy and 5 is Sell). The average target price is $446.47, implying approximately +25.8% upside from the current price of $354.97. The distribution shows a bullish tilt, with recent actions including upgrades from JP Morgan (Overweight from Neutral) and reaffirmations from Goldman Sachs, Susquehanna, and others. The target price range spans from a low of $350.00 to a high of $550.00, with the low target roughly at the current price, suggesting some analysts see limited downside, while the high target implies +55% upside, reflecting optimism about AI-driven demand and market share gains. The wide spread of $200 between low and high targets indicates significant uncertainty about the sustainability of growth and the semiconductor cycle, but the overall consensus remains firmly bullish, supported by strong fundamentals and positive industry tailwinds.
Bulls vs Bears: TER Investment Factors
Teradyne presents a compelling growth story driven by AI and memory chip demand, with explosive revenue growth and expanding margins. However, the stock trades at a significant premium to peers, and its cyclical nature poses risks. The bull case is currently stronger, supported by robust fundamentals and analyst optimism, but the key tension lies in whether the AI-driven demand is sustainable enough to justify the high valuation. If growth decelerates or the semiconductor cycle turns, the stock could face substantial downside.
Bullish
- Explosive Revenue Growth: Q1 2026 revenue surged 87.0% YoY to $1.282 billion, driven by AI and memory chip demand. This marks a dramatic acceleration from $652 million in Q2 2025, showcasing the company's pivotal role in the semiconductor upcycle.
- Expanding Profit Margins: Gross margin improved to 60.9% in Q1 2026 from 57.5% in Q4 2025, while operating margin reached 36.9%. Net margin expanded to 31.1%, reflecting strong operating leverage and pricing power.
- Dominant Market Position: Teradyne holds a leading share in semiconductor test equipment, serving major chipmakers. Its inclusion in the Nasdaq-100 highlights its strategic importance in the AI computing ecosystem.
- Strong Analyst Consensus: With a consensus rating of 'Buy' (mean 1.65) and an average target of $446.47, analysts see ~25.8% upside. Recent upgrades from JP Morgan and reaffirmations from Goldman Sachs underscore positive sentiment.
Bearish
- High Valuation Multiple: Trailing PE is 55.5x and forward PE is 30.5x, a 39% premium to the industry average of ~22x. The PEG ratio of 23.6x suggests the stock is overvalued relative to its growth rate.
- Cyclicality Risk: Semiconductor test equipment is highly cyclical. Revenue fell from $752.9M in Q4 2024 to $651.8M in Q2 2025, demonstrating vulnerability to demand swings. A downturn could sharply reduce earnings.
- Recent Price Volatility: The stock dropped 27.2% from its 52-week high of $487.91 to $354.97, with a max drawdown of -33.98%. High beta of 1.793 amplifies market swings, as seen in the April 2026 plunge.
- Short-Seller Sentiment: Michael Burry's high-profile short bet on semiconductors signals potential overextension. The short ratio of 1.95 indicates elevated bearish positioning, which could pressure the stock.
TER Technical Analysis
Teradyne's stock has exhibited a powerful long-term uptrend, with a 1-year price change of +201.1%, far outpacing the S&P 500's +18.6% over the same period. The current price of $354.97 sits at approximately 72.7% of the 52-week range (low $109.56, high $487.91), indicating the stock has pulled back significantly from its highs but remains well above its lows. This positioning suggests a consolidation phase after a massive rally, with the stock still in a strong overall uptrend but facing near-term resistance. The 6-month price change of +10.9% and YTD change of +71.0% confirm the longer-term bullish momentum, though the stock is currently below its 52-week high by 27.2%.
Beta
1.79
1.79x market volatility
Max Drawdown
-34.0%
Largest decline past year
52-Week Range
$110-$488
Price range past year
Annual Return
+183.7%
Cumulative gain past year
| Period | TER Return | S&P 500 |
|---|---|---|
| 1m | -8.8% | +2.0% |
| 3m | -18.1% | +1.0% |
| 6m | +9.8% | +11.8% |
| 1y | +183.7% | +18.1% |
| ytd | +61.6% | +11.7% |
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TER Fundamental Analysis
Teradyne's revenue trajectory has been exceptionally strong, with Q1 2026 revenue of $1.282 billion, up 87.0% year-over-year, and sequential growth from $1.083 billion in Q4 2025, $769 million in Q3 2025, and $652 million in Q2 2025. This acceleration is driven by surging demand for semiconductor test equipment, particularly for AI and memory chips, as evidenced by the 87.0% YoY growth rate. The company's product segment contributed $1.143 billion (89.1% of revenue) while service added $139.5 million, indicating the core test equipment business is the primary growth engine. Profitability has expanded dramatically, with Q1 2026 net income of $398.9 million (net margin 31.1%) versus $257.2 million in Q4 2025 (23.7%) and $119.6 million in Q3 2025 (15.5%). Gross margin improved to 60.9% in Q1 2026 from 57.5% in Q4 2025, and operating margin reached 36.9%, reflecting strong operating leverage. The balance sheet remains solid with a debt-to-equity ratio of 0.124, current ratio of 1.76, and free cash flow of $200.4 million in Q1 2026, though FCF was lower than net income due to working capital changes. ROE stands at 19.8% and ROA at 19.7%, indicating efficient capital deployment, while the company maintains a modest dividend yield of 0.25%.
Quarterly Revenue
$1.3B
2026-03
Revenue YoY Growth
+87.0%
YoY Comparison
Gross Margin
60.9%
Latest Quarter
Free Cash Flow
$553179999.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is TER Overvalued?
Given Teradyne's positive net income, the price-to-earnings (PE) ratio is the most appropriate valuation metric. The trailing PE is 55.5x, while the forward PE is 30.5x, implying the market expects significant earnings growth, consistent with the 87% revenue growth and analyst estimates of EPS rising to $15.46 on average. The gap between trailing and forward PE suggests the market is pricing in a substantial earnings increase, which is supported by the company's recent performance and AI-driven demand. Compared to the industry, Teradyne's forward PE of 30.5x is at a premium to the semiconductor industry average of approximately 22x, representing a 39% premium, which is justified by its superior growth and dominant market position. Historically, Teradyne's trailing PE has ranged from roughly 17x to 67x over the past few years, with the current 55.5x near the higher end of that range, indicating the market is pricing in optimistic expectations for continued growth, though the PEG ratio of 23.6x suggests the stock may be overvalued relative to its growth rate.
PE
55.5x
Latest Quarter
vs. Historical
High-End
5-Year PE Range 16x~49x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
39.5x
Enterprise Value Multiple
Investment Risk Disclosure
Financial risks include high valuation multiples (trailing PE 55.5x, forward PE 30.5x) that leave little room for error. The PEG ratio of 23.6x suggests the market expects extraordinary growth, and any shortfall could trigger de-rating. Debt is low (D/E 0.124), but the company's cash flow is volatile; Q1 2026 FCF of $200.4M was lower than net income due to working capital needs. Revenue concentration in semiconductor test equipment (89.1% of Q1 revenue) exposes the company to sector-specific downturns, as evidenced by the 13.4% revenue decline from Q4 2024 to Q2 2025.