Update shared on 10 Dec 2025
Analysts have raised their price target on Teradata to $42.00, reflecting increased confidence that the company’s broader focus on recurring revenue and free cash flow growth can unlock stronger long term shareholder value.
Analyst Commentary
Bullish analysts view the upgrade and higher price target as evidence that Teradata is entering a more durable growth phase, supported by a clearer path to expanding free cash flow per share over the next several years.
They note that management’s strategy has evolved from a narrow focus on public cloud annual recurring revenue growth to a broader, more balanced framework that prioritizes overall ARR, profitability, and cash generation. They see these factors as key inputs to potential valuation re rating.
The stock’s recent underperformance, including a double digit year to date decline, is also seen as creating a more attractive entry point, particularly if the company can execute consistently on its new priorities and demonstrate operating leverage.
At the same time, some investors remain attentive to execution risk and the need for Teradata to prove that its expanded strategic focus can translate into sustained growth above market expectations without sacrificing discipline around capital allocation and margins.
What's in the News
- The U.S. Supreme Court declined to hear SAP's appeal in an antitrust case, allowing Teradata's claims over alleged anti competitive tying of SAP software and databases to proceed (Reuters).
- Teradata updated its outlook, guiding to modest revenue declines in the fourth quarter and full year 2025, while reiterating expectations for mid teens public cloud ARR growth and flat to slightly higher total ARR.
- The company expanded its AI portfolio with the launch of comprehensive Teradata AI Services. These services are aimed at helping enterprises move AI pilots into production ready, agent based solutions across industries.
- Teradata introduced Autonomous Customer Intelligence, a software and services stack that embeds AI agents throughout the customer experience lifecycle to support real time, data driven personalization at scale.
- Teradata launched AgentBuilder, a new suite of tools for building and managing autonomous, context aware AI agents on its Vantage and MCP platforms, with a private preview planned for late 2025.
Valuation Changes
- Fair Value Estimate is unchanged at $27.80, indicating no revision to the intrinsic value per share.
- The Discount Rate has risen slightly from 9.03 percent to 9.04 percent, reflecting a modest adjustment to the required return.
- Revenue Growth is effectively unchanged at approximately 4.98 percent, with only a negligible numerical refinement.
- Net Profit Margin remains stable at about 9.47 percent, suggesting no meaningful shift in long term profitability assumptions.
- The Future P/E has increased marginally from 20.47x to 20.47x, implying a very small upward tweak to the valuation multiple applied.
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