NasdaqGS:TER

Stock Analysis Report

Executive Summary

Teradyne, Inc. designs, develops, manufactures, sells, and supports automatic test equipment worldwide.


Snowflake Analysis

Excellent balance sheet with proven track record.


Similar Companies

Share Price & News

How has Teradyne's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: TER has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-5.9%

TER

-2.8%

US Semiconductor

-1.1%

US Market


1 Year Return

60.0%

TER

35.6%

US Semiconductor

17.9%

US Market

Return vs Industry: TER exceeded the US Semiconductor industry which returned 35.6% over the past year.

Return vs Market: TER exceeded the US Market which returned 17.9% over the past year.


Shareholder returns

TERIndustryMarket
7 Day-5.9%-2.8%-1.1%
30 Day-8.5%-0.9%1.4%
90 Day3.8%10.7%6.9%
1 Year61.1%60.0%38.2%35.6%20.3%17.9%
3 Year133.5%128.1%90.1%79.8%47.8%38.3%
5 Year257.9%241.6%149.4%125.6%71.9%53.0%

Price Volatility Vs. Market

How volatile is Teradyne's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Teradyne undervalued compared to its fair value and its price relative to the market?

23.47x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: TER ($66) is trading above our estimate of fair value ($45.08)

Significantly Below Fair Value: TER is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: TER is good value based on its PE Ratio (23.5x) compared to the Semiconductor industry average (37.3x).

PE vs Market: TER is poor value based on its PE Ratio (23.5x) compared to the US market (18.2x).


Price to Earnings Growth Ratio

PEG Ratio: TER is poor value based on its PEG Ratio (2.4x)


Price to Book Ratio

PB vs Industry: TER is overvalued based on its PB Ratio (7.4x) compared to the US Semiconductor industry average (3.1x).


Next Steps

Future Growth

How is Teradyne forecast to perform in the next 1 to 3 years based on estimates from 14 analysts?

9.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: TER's forecast earnings growth (9.7% per year) is above the savings rate (1.7%).

Earnings vs Market: TER's earnings (9.7% per year) are forecast to grow slower than the US market (14.1% per year).

High Growth Earnings: TER's earnings are forecast to grow, but not significantly.

Revenue vs Market: TER's revenue (8.7% per year) is forecast to grow faster than the US market (7.6% per year).

High Growth Revenue: TER's revenue (8.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: TER's Return on Equity is forecast to be high in 3 years time (36.1%)


Next Steps

Past Performance

How has Teradyne performed over the past 5 years?

36.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: TER has high quality earnings.

Growing Profit Margin: TER's current net profit margins (20.9%) are lower than last year (21.5%).


Past Earnings Growth Analysis

Earnings Trend: TER's earnings have grown significantly by 36.7% per year over the past 5 years.

Accelerating Growth: TER's earnings growth over the past year (6.1%) is below its 5-year average (36.7% per year).

Earnings vs Industry: TER earnings growth over the past year (6.1%) exceeded the Semiconductor industry -28.7%.


Return on Equity

High ROE: TER's Return on Equity (32.1%) is considered high.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Teradyne's financial position?


Financial Position Analysis

Short Term Liabilities: TER's short term assets ($1.7B) exceed its short term liabilities ($539.0M).

Long Term Liabilities: TER's short term assets ($1.7B) exceed its long term liabilities ($765.5M).


Debt to Equity History and Analysis

Debt Level: TER's debt to equity ratio (26.5%) is considered satisfactory.

Reducing Debt: Insufficient data to determine if TER's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: TER's debt is well covered by operating cash flow (146.6%).

Interest Coverage: TER's interest payments on its debt are well covered by EBIT (113.1x coverage).


Balance Sheet

Inventory Level: TER has a high level of physical assets or inventory.

Debt Coverage by Assets: TER's debt is covered by short term assets (assets are 4.2x debt).


Next Steps

Dividend

What is Teradyne's current dividend yield, its reliability and sustainability?

0.61%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: TER's dividend (0.61%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.45%).

High Dividend: TER's dividend (0.61%) is low compared to the top 25% of dividend payers in the US market (3.73%).


Stability and Growth of Payments

Stable Dividend: TER is not paying a notable dividend for the US market, therefore no need to check if payments are stable.

Growing Dividend: TER is not paying a notable dividend for the US market, therefore no need to check if payments are increasing.


Current Payout to Shareholders

Dividend Coverage: TER is not paying a notable dividend for the US market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of TER's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

4.0yrs

Average management tenure


CEO

Mark Jagiela (58yo)

6yrs

Tenure

US$7,172,691

Compensation

Mr. Mark E. Jagiela has been the Chief Executive Officer of Teradyne Inc. since February 01, 2014 and has been its President since January 1, 2013 and served as its President of Semiconductor Test from 200 ...


CEO Compensation Analysis

Compensation vs Market: Mark's total compensation ($USD7.17M) is below average for companies of similar size in the US market ($USD10.81M).

Compensation vs Earnings: Mark's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Mark Jagiela
President6yrsUS$7.17m0.22% $24.3m
Charles Gray
VP, General Counsel & Secretary10.8yrsUS$1.70m0.017% $1.8m
Walter Vahey
Executive Vice President of Corporate Development1.1yrsUS$1.34m0.040% $4.5m
Bradford Robbins
President5.5yrsUS$1.32m0.020% $2.3m
Gregory Smith
President of Semiconductor Test Division4yrsUS$1.81m0.016% $1.7m
Sanjay Mehta
CFO, VP & Treasurer0.8yrsno datano data
Michal Kimeldorfer-Rabinowitz
Vice President of Human Resources0yrsno datano data
Jürgen von Hollen
President of Universal Robots2.3yrsno datano data
Thomas Visti
Chief Executive Officer of MiR0yrsno datano data
Neil Tardella
Chief Executive Officer of Energid0yrsno datano data

4.0yrs

Average Tenure

57yo

Average Age

Experienced Management: TER's management team is considered experienced (4 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Mark Jagiela
President6yrsUS$7.17m0.22% $24.3m
Mercedes Johnson
Independent Director5.6yrsUS$245.00k0.015% $1.6m
Edwin Gillis
Independent Director13.3yrsUS$270.00k0.035% $3.9m
Michael Bradley
Independent Director15.8yrsUS$245.00k0.021% $2.3m
Paul Tufano
Independent Director14.9yrsUS$245.00k0.050% $5.6m
Roy Vallee
Independent Chair of the Board5.8yrsUS$300.00k0.047% $5.3m
Timothy Guertin
Independent Director9.1yrsUS$265.00k0.0091% $1.0m
Marilyn Matz
Independent Director2.6yrsUS$254.77k0.0056% $616.0k

7.5yrs

Average Tenure

65.5yo

Average Age

Experienced Board: TER's board of directors are considered experienced (7.5 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: TER insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Teradyne, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Teradyne, Inc.
  • Ticker: TER
  • Exchange: NasdaqGS
  • Founded: 1960
  • Industry: Semiconductor Equipment
  • Sector: Semiconductors
  • Market Cap: US$11.060b
  • Shares outstanding: 167.58m
  • Website: https://www.teradyne.com

Number of Employees


Location

  • Teradyne, Inc.
  • 600 Riverpark Drive
  • North Reading
  • Massachusetts
  • 1864
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
TERNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDOct 1970
TEYDB (Deutsche Boerse AG)YesCommon StockDEEUROct 1970
0LEFLSE (London Stock Exchange)YesCommon StockGBUSDOct 1970
TER *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNOct 1970
TEYBRSE (Berne Stock Exchange)YesCommon StockCHCHFOct 1970

Biography

Teradyne, Inc. designs, develops, manufactures, sells, and supports automatic test equipment worldwide. Its Semiconductor Test segment offers semiconductor test products and services for wafer level and device package testing in automotive, industrial, communications, consumer, computer and electronic game, and other applications. This segment offers FLEX test platform systems; J750 test system to address the highest volume semiconductor devices; Magnum platform that tests memory devices, such as flash memory and DRAM; and ETS platform for use by semiconductor manufacturers, and assembly and test subcontractors in the analog/mixed signal markets. This segment serves integrated device manufacturers that integrate the fabrication of silicon wafers into their business; fabless companies that outsource the manufacturing of silicon wafers; foundries; and outsourced semiconductor assembly and test providers. The company’s System Test segment offers defense/aerospace test instrumentation and systems; storage test systems; and circuit-board test and inspection systems. Its Industrial Automation segment provides collaborative robots for manufacturing and light industrial customers. The company’s Wireless Test segment provides test solutions for use in the development and manufacture of wireless devices, smart phones, tablets, notebooks, laptops, peripherals, and Internet-of-Things (IoT) devices under the LitePoint brand name. This segment offers IQxel products for Wi-Fi and other standards; IQxstream solution for testing GSM, EDGE, CDMA2000, TD-SCDMA, WCDMA, HSPA+, LTE-FDD, TD_LTE, and LTE-A technologies; modular wireless test instruments for design verification test and production testing of wireless components; lab-in-a-box zSeries solution for design verification of RF power amplifier and smart device RF front end modules; and test software for wireless chipsets. The company was founded in 1960 and is headquartered in North Reading, Massachusetts. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/23 00:51
End of Day Share Price2020/02/21 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.