Update shared on 11 Dec 2025
Fair value Increased 4.16%Analysts have lifted their fair value estimate for Teradyne from $184.69 to $192.38, citing stronger multiyear AI testing demand, improving revenue growth and margins, and higher expected future earnings power reflected in a richer forward P E multiple.
Analyst Commentary
Recent Street research updates point to a sharp improvement in sentiment around Teradyne, with multiple firms raising price targets and, in some cases, upgrading ratings as AI driven test demand and Industrial Automation momentum become more visible through 2026 and beyond.
Bullish Takeaways
- Bullish analysts highlight Teradyne's growing role in AI compute and high bandwidth memory testing, arguing that increasing complexity and capacity needs support structurally higher revenue growth and a premium valuation multiple.
- Several models have been revised to reflect multi year acceleration in demand from leading foundries and OSAT partners, with higher out year EPS estimates underpinning price targets that now cluster around the high $100s to low $200s.
- The ramp in GPU wafer sort and SoC testing is seen as a key catalyst, with checks suggesting share gains at top tier manufacturers that could provide upside to consensus through 2026.
- Improving trends in Industrial Automation, including robotics deployments in large e commerce and warehouse environments, are viewed as a complementary growth driver that diversifies the earnings base and supports a richer forward P E.
Bearish Takeaways
- Bearish analysts caution that expectations for wafer fab equipment spending in 2026 may already be elevated, leaving less room for upside if AI driven investment normalizes or is delayed.
- Some remain hesitant to fully embed aggressive sales and EPS revisions, instead expanding valuation multiples on anticipated AI test demand, which increases sensitivity to execution risk and any slowdown in order momentum.
- There are lingering concerns that near term optimism from industry checks could prove overstated if memory and smartphone recoveries proceed more gradually than current forecasts assume.
- Despite higher price targets, a subset of more cautious views suggests that the current share price already discounts a substantial portion of the multi year AI and automation growth story, limiting risk reward asymmetry.
What's in the News
- Teradyne Robotics will open a new U.S. Operations Hub in Wixom, Michigan in 2026, expanding cobot manufacturing, adding potential AMR production, and creating over 200 jobs to support rising North American automation demand (Business Expansions).
- The company completed the repurchase of 10,780,000 shares, or 6.81% of shares outstanding, for $1.12 billion under its January 26, 2023 buyback program, including $246 million spent in the latest tranche (Buyback Tranche Update).
- Teradyne issued fourth quarter 2025 guidance, forecasting revenue of $920 million to $1.0 billion and GAAP diluted EPS of $1.12 to $1.39 (Corporate Guidance).
- Michelle Turner was appointed Chief Financial Officer effective November 3, 2025, succeeding long serving CFO Sanjay Mehta, who will remain as an executive advisor before retiring in 2026 (Executive Changes).
- Teradyne launched several new test platforms, including the ETS-800 D20 for power semiconductors, the Titan HP system level test platform for AI and cloud devices, and the UltraPHY 224G solution for next generation high speed PHY testing in data center and silicon photonics markets (Product Related Announcements).
Valuation Changes
- The Fair Value Estimate has risen slightly from $184.69 to $192.38 per share, reflecting modestly higher long term earnings expectations.
- The Discount Rate has edged down marginally from 10.45% to 10.43%, implying a slightly lower assumed cost of capital.
- Revenue Growth has increased slightly in the model from 16.94% to 17.01%, indicating a small uplift in projected top line expansion.
- The Net Profit Margin has improved marginally from 24.07% to 24.12%, signaling a modest enhancement in long term profitability assumptions.
- The future P E multiple has risen slightly from 32.10x to 33.29x, suggesting a higher expected valuation level on forward earnings.
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