Back to top

Image: Bigstock

Teradyne (TER) Laps the Stock Market: Here's Why

Read MoreHide Full Article

Teradyne (TER - Free Report) ended the recent trading session at $114.07, demonstrating a +1.63% change from the preceding day's closing price. The stock outpaced the S&P 500's daily gain of 0.47%. Meanwhile, the Dow gained 0.11%, and the Nasdaq, a tech-heavy index, added 0.94%.

Shares of the maker of wireless products, data storage and equipment to test semiconductors witnessed a gain of 2.58% over the previous month, trailing the performance of the Computer and Technology sector with its gain of 3.88%, and outperforming the S&P 500's gain of 2.32%.

Analysts and investors alike will be keeping a close eye on the performance of Teradyne in its upcoming earnings disclosure. It is anticipated that the company will report an EPS of $0.78, marking a 13.33% fall compared to the same quarter of the previous year. Our most recent consensus estimate is calling for quarterly revenue of $744.48 million, up 0.97% from the year-ago period.

For the full year, the Zacks Consensus Estimates project earnings of $3.13 per share and a revenue of $2.89 billion, demonstrating changes of -2.8% and +2.61%, respectively, from the preceding year.

Investors should also pay attention to any latest changes in analyst estimates for Teradyne. Such recent modifications usually signify the changing landscape of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.39% lower. Teradyne presently features a Zacks Rank of #3 (Hold).

In the context of valuation, Teradyne is at present trading with a Forward P/E ratio of 35.85. This represents a premium compared to its industry average Forward P/E of 20.25.

Also, we should mention that TER has a PEG ratio of 2.36. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The Electronics - Miscellaneous Products was holding an average PEG ratio of 1.88 at yesterday's closing price.

The Electronics - Miscellaneous Products industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 86, putting it in the top 35% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Teradyne, Inc. (TER) - free report >>

Published in