A Look at Teradyne’s (TER) Valuation as Bearish Options Activity Rises Despite Analyst Optimism

Teradyne (TER) has caught the attention of investors after a sharp increase in bearish options activity this month. Large institutional players are placing bets on potential downside, even as many analysts remain optimistic.

See our latest analysis for Teradyne.

Despite a sharp dip of over 7% in the last trading day, Teradyne’s one-month share price return stands at a strong 8.8%, with a remarkable 35% gain over the past three months. Total shareholder return has been even more impressive, reaching 48% over the past year. While recent news of a quarterly dividend and heightened bearish options activity has stirred the waters, momentum remains firmly positive and suggests investors are weighing fresh growth potential against perceived risks.

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With the stock’s recent rally and a surge of contrasting market signals, the big question now is whether Teradyne is truly undervalued or if the recent gains mean investors have already priced in all its future growth potential.

Most Popular Narrative: 9.7% Undervalued

Teradyne’s latest fair value estimate of $172.63 stands well above the last close of $155.90, pushing the debate on whether investors are missing out on a deeper growth story. The latest narrative calls out the factors that could justify a price move beyond where the market sits today.

The analysts have a consensus price target of $116.062 for Teradyne based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $133.0, and the most bearish reporting a price target of just $85.0.

Read the complete narrative.

Want to know what’s powering this eye-catching valuation? Behind the headline number is a series of sharp forecasts on profits, margins, and future revenue expansion. The path to this price target is anything but straightforward. Discover which financial bets and major inflection points the narrative is banking on; one detail could change your outlook entirely.

Result: Fair Value of $172.63 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, ongoing trade tensions and unpredictable robotics demand remain wildcards, which could derail Teradyne’s optimistic growth projections if sector headwinds persist.

Find out about the key risks to this Teradyne narrative.

Another View: High Multiple Signals Caution

While some analysts see Teradyne as undervalued, its current price-to-earnings ratio sits at 55.1x, which is far above peers at 28.4x and the industry average at 32.8x. Even compared to the fair ratio of 38x, Teradyne appears expensive, suggesting heightened valuation risk if expectations are not met. Does this premium signal sustained growth, or is it an early warning?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Teradyne Narrative

If you have a different take, or want to dig into the details yourself, you can assemble your own Teradyne narrative in just a few minutes. Do it your way

A good starting point is our analysis highlighting 1 key reward investors are optimistic about regarding Teradyne.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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