Teradyne TER shares have misplaced 10.5% 12 months thus far, underperforming the Zacks Computer & Technology sector’s appreciation of two.1% and the Zacks Electronics – Miscellaneous Products business’s return of 5.4%.
The autumn in Teradyne’s share value could be attributed to smooth first-quarter 2025 steering. The corporate now expects gross sales between $660 million and $700 million, which displays a sequential decline. Though the Semiconductor Take a look at outlook stays sturdy, the Robotics forecast is seasonably smooth as the corporate operates in a troublesome, low-visibility industrial spending setting.
TER reported fourth-quarter 2024 revenues of $753 million, which elevated 12.2% 12 months over 12 months and beat the Zacks Consensus Estimate by 1.65%. Earnings of 95 cents per share surpassed the consensus mark by 5.56% and elevated 20.3% 12 months over 12 months.
The Zacks Consensus Estimate for first-quarter 2025 earnings is at present pegged at 61 cents per share, down 3 cents previously 30 days and indicating 19.61% progress over the year-ago quarter’s reported determine. The consensus mark for revenues is pegged at $683.08 million, suggesting 13.88% year-over-year progress.
Discover the most recent EPS estimates and surprises on Zacks Earnings Calendar.
Teradyne, Inc. Worth and Consensus
Teradyne, Inc. price-consensus-chart | Teradyne, Inc. Quote
On a trailing 12-month foundation, TER shares have returned 14%, underperforming the broader sector’s appreciation of 24.6%.
TER Inventory’s Efficiency
Picture Supply: Zacks Funding Analysis
Increasing AI Enterprise to Assist TER Shares Get well in 2025
Teradyne’s SOC and reminiscence take a look at revenues elevated 17% 12 months over 12 months in 2024 pushed by sturdy demand for AI accelerator ASICs, networking and Excessive Bandwidth Reminiscence (“HBM”).
Teradyne expects the SOC Complete Addressable Market to develop roughly 7% 12 months over 12 months in 2025, pushed by sturdy demand for AI Compute, and restoration in Cellular, Automotive and Industrial domains within the second half of the 12 months. The addition of system-level take a look at insertions for AI Compute each within the Cloud and on the Edge affords an extra progress alternative for Teradyne.
TER expects the HBM system finish market to stay sturdy by 2025, pushed by AI compute demand for HBM. The corporate expects HBM demand to melt and expects your entire Reminiscence take a look at market to be flattish in 2025.
Energy semiconductor units supply long-term alternatives for Teradyne because the transition to electrical autos (EVs) accelerates and the demand for extra environment friendly energy technology, storage and distribution. The Infineon IFNNY partnership settlement, beneath which TER is buying the previous’s inside tester growth staff in Regensburg, Germany, is predicted to speed up Teradyne’s footprint within the energy semiconductor house.
Accelerating the deployment of AI into cell and car functions, notably Edge units, bodes nicely for Teradyne’s midterm prospects. The corporate expects to develop from $2.8 billion in revenues in 2024 to $5 billion in 2028, implying a CAGR between 12% and 18% over the 2024-2028 timeframe. Earnings are anticipated to develop from $3.22 per share in 2024 to $8.25 per share in 2028, implying a CAGR between 21% and 31% over the 2024-2028 timeframe.
Weak Wi-fi, System & Robotics Damage TER’s Prospects
Teradyne’s System and Wi-fi Take a look at companies proceed to endure from weak end-market situations. On a mixed foundation, the System Take a look at and Wi-fi Take a look at companies revenues fell 4% 12 months over 12 months in 2024.
Teradyne expects the Wi-fi Take a look at enterprise to return to progress in 2025. The corporate secured 74 out of 80 tracked WiFi 7 design win alternatives in 2024.
Industrial automation end-market stays weak. Teradyne ended 2024 down barely for Common Robots (UR) and roughly flat for Cellular Industrial Robots (MiR).
Teradyne mixed UR and MiR operations right into a unified robotics operation group in 2024. The corporate is considering promoting the complete UR and MiR product traces by companions and plans to serve prospects higher with a single customer support group. The restructuring is predicted to extend the effectivity of the Robotics division.
Nonetheless, Robotics’ breakeven revenues are anticipated to say no from $440 million in 2024 to $365 million in 2025.
Teradyne Shares Commerce at a Premium
TER inventory is overvalued, as urged by the Value Score of D.
TER inventory is buying and selling at a ahead 12-month P/E of 27.81X in contrast with the broader sector’s 26.88X.
Worth/Earnings (F12M)
Picture Supply: Zacks Funding Analysis
Teradyne shares are buying and selling under the 50-day and 200-day transferring averages, indicating a bearish pattern.
TER Trades Under 50-day & 200-day SMA
Picture Supply: Zacks Funding Analysis
What Ought to Traders Do With TER Shares?
Teradyne is benefiting from its strong and diversified portfolio. Bettering reminiscence and compute outlook pushed by the constructive affect of AI-driven functions on take a look at demand is predicted to drive top-line progress regardless of weak spot in cell and industrial end-markets.
Nonetheless, weak spot in Robotics is a priority, together with softness within the System and Wi-fi companies. This, together with a stretched valuation, is a dangerous guess for traders.
Teradyne at present carries Zacks Rank #3 (Maintain), which suggests traders ought to await higher entry factors within the inventory. You’ll be able to see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks Names #1 Semiconductor Inventory
It is only one/9,000th the dimensions of NVIDIA which skyrocketed greater than +800% since we advisable it. NVIDIA remains to be sturdy, however our new prime chip inventory has rather more room to growth.
With sturdy earnings progress and an increasing buyer base, it is positioned to feed the rampant demand for Synthetic Intelligence, Machine Studying, and Web of Issues. World semiconductor manufacturing is projected to blow up from $452 billion in 2021 to $803 billion by 2028.
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