The analyst fair value estimate for Teradata has moved from $39.79 to $49.00, reflecting higher Street price targets as analysts factor in updated views on revenue growth, profitability, and future P/E assumptions.
Analyst Commentary
Recent Street research on Teradata has leaned constructive, with several bullish analysts lifting their price targets and reinforcing a more supportive sentiment around the stock. These moves line up with the higher fair value estimate, which already embeds updated assumptions on revenue trends, profitability, and future P/E levels.
Target changes have come in across a range of timeframes, including adjustments tied to broader software sector outlooks for 2026. While individual ratings vary, the cluster of higher targets points to increased confidence in Teradata's ability to execute on its plan and support the revised valuation assumptions.
Bullish Takeaways
- Multiple bullish analysts have raised price targets by mid single to low teens dollar amounts, which supports the idea that higher revenue and profitability assumptions are gaining traction in Street models.
- Some research framed the revised targets within a 2026 software sector outlook, which suggests Teradata is being included in a group where analysts see conditions like stable macro and IT spending as supportive for execution.
- Despite one firm maintaining an Underweight stance at a US$27 target, the higher target level itself still reflects a reassessment of Teradata's potential earnings power and P/E, rather than a reduction in expectations.
- The clustering of upward target moves around the same period indicates that fresh information has prompted analysts to revisit their valuation work, which aligns with the step up in the fair value estimate to US$49.00.
What's in the News
- Teradata announced a cooperation agreement with Lynrock Lake LP that includes expected Board changes. Melissa Fisher is to be appointed as a Class I director by March 1, 2026 and nominated for a term through the 2029 annual meeting. An additional independent director search is underway, and Lynrock Lake has agreed to support the Board’s full slate and adhere to standstill and related provisions (Key Developments).
- The company issued earnings guidance for 2026, targeting first quarter revenue growth in a 1% to 3% range year over year with GAAP diluted EPS of US$0.36 to US$0.40. For full year 2026, the company expects total revenue in a range from a 2% decline to flat year over year with GAAP diluted EPS of US$1.26 to US$1.36 (Key Developments).
- Teradata reported that between October 1, 2025 and December 31, 2025 it repurchased 5,342,137 shares, or 5.7% of shares, for US$140 million. This brought cumulative repurchases under the buyback announced on February 9, 2012 to 107,579,431 shares, or 87.94% of the authorization, for US$3,995.79 million (Key Developments).
- A separate tranche update covering November 17, 2025 to December 31, 2025 showed no additional shares repurchased and no incremental spend. The company stated that the repurchase of 0 shares for US$0 under that tranche is now complete (Key Developments).
- Teradata introduced Enterprise AgentStack, an open and connected stack aimed at helping enterprises move AI agents from pilot to production across hybrid environments. The offering combines tools like AgentBuilder, AgentEngine, AgentOps and Enterprise MCP to support secure data discovery, agent deployment, and governance around AI agent workflows (Key Developments).
Valuation Changes
- Fair Value: The analyst fair value estimate has moved from $39.79 to $49.00, an increase of roughly 23%.
- Discount Rate: The discount rate has risen slightly from 9.02% to 9.10%, indicating a modestly higher required return in the model.
- Revenue Growth: The assumed revenue growth rate has shifted from 0.77% to 1.23%, suggesting a somewhat higher projected top line trajectory in the valuation work.
- Net Profit Margin: The modeled net profit margin has moved from 8.92% to 10.14%, reflecting a higher expected level of earnings relative to revenue.
- Future P/E: The future P/E multiple used in the analysis has edged down from 30.46x to 29.82x, indicating a slightly more conservative earnings multiple alongside the higher fair value estimate.
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