Teradyne Suffers Revenue Shortfall and Lower Guidance than Expected
January 10, 2023
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Teradyne Intrinsic Value – Teradyne ($NASDAQ:TER) is a global supplier of equipment for testing and industrial applications, as well as producers of Automated Test Equipment (ATE) used to test semiconductors in wireless, memory and complex electronic systems. The company has been underperforming the semiconductor sector, symbolized by the iShares Semiconductor ETF, by around 12% since analysts at Stifel downgraded Teradyne in January of last year and lowered their price target to $115, down from $160. The primary cause for this underperformance is a significant revenue shortfall and lower guidance than expected from the Company.
The company also lowered its guidance for the rest of the year, which came as a surprise to many investors. Teradyne’s ATE solutions are essential for testing and certifying semiconductor components, and this revenue shortfall demonstrates how easily the company can be affected by changes in the global semiconductor market. The company has been investing heavily in new technologies and products in recent years, so it is hopeful that these investments will pay off in the long run and help it to become more resilient to external factors.
Price History
On Monday, Teradyne, a leader in automated test equipment, saw its stock open at $92.9 and close at $93.2, up by 2.2% from its previous closing price of 91.2. So far, media coverage of Teradyne has mostly been positive, with many analysts suggesting that the company may be able to weather any short term turbulence. The revenue shortfall was attributed to a slower than anticipated recovery in demand for Teradyne’s products in the automotive and industrial sectors. This has caused some investors to worry about the company’s long-term prospects, as it is heavily reliant on sales from these two sectors. Despite these concerns, Teradyne remains committed to its strategy and is confident that it can bounce back from this setback. In order to do so, the company will be focusing on strengthening its customer relationships and launching new products that appeal to different markets. Additionally, Teradyne has also taken steps to reduce costs and improve efficiency in order to remain profitable in the face of lower demand for its products. Overall, Teradyne still has a lot of potential going forward and is well-positioned to take advantage of any recovery in demand for its products.
However, investors will need to keep a close eye on the company’s progress to make sure that it is able to meet its financial targets and continue to deliver strong returns for shareholders. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Teradyne. More…
| Total Revenues | Net Income | Net Margin |
| 3.31k | 767.24 | 23.6% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Teradyne. More…
| Operations | Investing | Financing |
| 725.8 | 9.72 | -1.11k |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Teradyne. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 3.32k | 1.07k | 14.47 |
Key Ratios Snapshot
Some of the financial key ratios for Teradyne are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 15.3% | 24.5% | 27.4% |
| FCF Margin | ROE | ROA |
| 17.2% | 24.9% | 17.0% |
VI Analysis – Teradyne Intrinsic Value Calculator
TERADYNE‘s fundamentals reflect the company’s long-term potential. The VI Line helps to analyze the company in a simple way. According to the analysis, the fair value of TERADYNE’s shares is approximately $108.6. However, the stock is currently priced at $93.2, making it a fair price that is undervalued by 14%. This presents an opportunity for investors as they can purchase shares at a discounted price and benefit from potential upside when the stock price rises to its fair value. TERADYNE has a strong balance sheet and a well-established presence in the industry, making it an attractive option for investors looking for a good long-term investment. The company also has a history of paying a healthy dividend, providing investors with an additional source of income. With these qualities, TERADYNE is an attractive option for investors who wish to capitalize on the current undervaluation and benefit from its potential for long-term gains. More…
VI Peers
The competition between Teradyne Inc and its competitors is fierce. Lam Research Corp, Taiwan Semiconductor Manufacturing Co Ltd, and Apple Inc are all major players in the market. Teradyne Inc has been able to stay ahead of the competition by innovating and developing new products.
– Lam Research Corp ($NASDAQ:LRCX)
Lam Research Corporation is an American company that manufactures semiconductor processing equipment used in the fabrication of integrated circuits. The company was founded in 1980 and is headquartered in Fremont, California. Lam Research has a market capitalization of $51.81 billion as of March 2021 and a return on equity of 54.63%. The company’s products are used in a variety of applications, including memory chips, microprocessors, and graphics processors.
– Taiwan Semiconductor Manufacturing Co Ltd ($TWSE:2330)
With a market cap of 9.75T as of 2022, Taiwan Semiconductor Manufacturing Co Ltd is one of the largest companies in the world. The company’s return on equity is 22.34%, meaning that it generates a significant amount of profit for shareholders. Taiwan Semiconductor Manufacturing Co Ltd is a leading provider of semiconductor manufacturing services and one of the largest manufacturers of semiconductors in the world. The company’s products are used in a wide range of electronic devices, including computers, mobile phones, and consumer electronics.
– Apple Inc ($NASDAQ:AAPL)
Apple Inc. is an American multinational technology company headquartered in Cupertino, California, that designs, develops, and sells consumer electronics, computer software, and online services. The company’s products and services include iPhone, iPad, Mac, iPod, Apple Watch, Apple TV, a portfolio of consumer and professional software applications, iCloud, and iTunes. Founded in 1976 by Steve Jobs, Steve Wozniak, and Ronald Wayne, Apple was incorporated as Apple Computer, Inc., in 1977. The word “Computer” was removed from the company’s name in 2007, as its traditional focus on personal computers shifted towards consumer electronics.
Summary
TERADYNE is a technology company focused on automation and testing solutions. Despite positive media coverage, its recent financial results have been disappointing. The company reported a revenue shortfall and lowered its guidance for the current quarter.
This has caused investors to reassess their positions in the stock, as the news points to potential operational issues. Investors should take into consideration the potential risks of investing in TERADYNE before making a decision to buy or sell its shares.
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