TERADYNE, INC (TER) Stock Analysis
TERADYNE, INC (TER) Stock Analysis
Analysis from 10-Q filed 2025-10-30. Data as of Q4 2025.
Overall Grade: F (Concerning)
TERADYNE, INC faces challenges in financial performance that warrant careful analysis.
| Metric | Value | Context |
|---|---|---|
| ROIC | 19.9% | Solid returns |
| FCF Margin | 14.1% | Healthy cash flow |
| Debt/Equity | 0.1x | Conservative leverage |
Investment Thesis: Strong return on invested capital of 19.9% suggests durable competitive advantages and efficient capital allocation.
Explore TERADYNE, INC: Earnings History | Filing Intelligence | ROIC Analysis
Profitability: TERADYNE, INC earns 19.9% ROIC, Top 25% in Technology
TERADYNE, INC's trailing-twelve-month ROIC of 19.9% ranks Top 25% in Technology companies (sector median: 5.2%), driven by NOPAT margin of 17.9% combined with asset turnover of 0.8x. Source: 10-Q filed 2025-10-30. Gross margin of 58.2% with operating margin at 20.4% reflects strong pricing power.
| Metric | TER | Rating | Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 19.9% | Good | Above sector median of 5.2% |
| Return on Equity (ROE) | 19.9% | Good | Efficient use of shareholder equity |
| Gross Margin | 58.2% | Excellent | Strong pricing power |
| Operating Margin | 20.4% | Excellent | Efficient operations |
Cash Flow: TERADYNE, INC generates $450.4M FCF at 14.1% margin, positive NaN/8 quarters
TERADYNE, INC generated $450.4M in free cash flow (TTM), a 14.1% FCF margin, a margin that ranks Top 50% in Technology. Operating cash flow exceeds net income by 1.2x, indicating high earnings quality. FCF was positive in N/A of the last 8 quarters. Source: 10-Q filed 2025-10-30.
| Metric | TER | Rating | Context |
|---|---|---|---|
| Free Cash Flow Margin | 14.1% | Good | Healthy cash generation |
| Free Cash Flow (TTM) | $450.4M | Good | Positive cash generation |
| OCF/Net Income | 1.2x | Excellent | High earnings quality |
| FCF Consistency (8Q) | N/A | Warning | Variable cash flow |
Balance Sheet: TERADYNE, INC at 0.1x leverage
TERADYNE, INC's debt-to-equity ratio of 0.1x reflects conservative leverage. Net cash position of $93.8M provides financial flexibility. Source: 10-Q filed 2025-10-30.
| Metric | TER | Rating | Context |
|---|---|---|---|
| Debt to Equity | 0.1x | Excellent | Conservative capital structure |
| Net Cash Position | $93.8M | Excellent | Net cash positive |
Valuation: TERADYNE, INC trades at 55.6x earnings
TERADYNE, INC trades at a P/E of 55.6x. Free cash flow yield of 1.5% reflects market expectations for growth.
| Metric | TER | Rating | Context |
|---|---|---|---|
| P/E Ratio | 55.6x | Warning | Premium valuation |
| EV/Sales | 9.6x | Adequate | Growth premium priced in |
| FCF Yield | 1.5% | Warning | Lower cash yield |
| Dividend Yield | 0.2% | Adequate | Growth focus over income |
Capital Allocation: TERADYNE, INC returns 2.5% shareholder yield
TERADYNE, INC's total shareholder yield is 2.5% (dividends 0.2% + buybacks 2.3%). Source: 10-Q filed 2025-10-30.
| Metric | TER | Rating | Context |
|---|---|---|---|
| Total Shareholder Yield | 2.5% | Adequate | Dividend + buyback yield combined |
| Buyback Yield | 2.3% | Adequate | Active share repurchases |
| Total Capital Returned (TTM) | $778.4M | Good | Dividends + buybacks returned to shareholders |
Sector Rankings
| Metric | Value | Percentile | vs Median |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 19.9% | Top 25% | 3.8x above |
| Free Cash Flow Margin | 14.1% | Top 50% | 1.6x above |
| Gross Margin | 58.2% | Top 50% | 1.1x above |
| Operating Margin | 20.4% | Top 25% | 4.2x above |
| Return on Equity (ROE) | 19.9% | Top 25% | 4.1x above |
| P/E Ratio | 55.6x | N/A | - |
Financial Scorecard
| Metric | TER | Rating | Sector Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 19.9% | Good | Top 25% of sector (median: 5.2%) |
| Free Cash Flow Margin | 14.1% | Good | Top 50% of sector (median: 9.1%) |
| Gross Margin | 58.2% | Excellent | Top 50% of sector (median: 51.8%) |
| Debt to Equity Ratio | 7.2% | Excellent | Conservative capital structure |
| P/E Ratio (Price-to-Earnings) | 55.6x | Warning | High expectations priced in |
| Free Cash Flow Yield | 1.5% | Warning | Growth-focused valuation |
Frequently Asked Questions
Q: What is TERADYNE, INC's Return on Invested Capital (ROIC)?
TERADYNE, INC (TER) has a trailing twelve-month Return on Invested Capital (ROIC) of 19.9%. This compares above the sector median of 5.2%. An ROIC between 12-20% indicates solid capital allocation and sustainable competitive position.
Q: What is TERADYNE, INC's Free Cash Flow Margin?
TERADYNE, INC (TER) has a free cash flow margin of 14.1%, generating $450.4 million in free cash flow over the trailing twelve months. A FCF margin between 10-20% represents healthy cash generation for most industries.
Q: Is TERADYNE, INC stock overvalued or undervalued?
TERADYNE, INC (TER) trades at a P/E ratio of 55.6x, which is above the sector median of N/A. The EV/Sales multiple is 9.6x. Free cash flow yield is 1.5%, reflecting growth expectations priced into the stock.
Q: Does TERADYNE, INC pay a dividend?
TERADYNE, INC (TER) currently pays a dividend yield of 0.2%. Including share buybacks, the total shareholder yield is 2.5%. The relatively low yield suggests the company prioritizes growth reinvestment over income distribution.
Q: What is TERADYNE, INC's revenue and earnings growth?
TERADYNE, INC (TER) grew revenue by 13.1% year-over-year. Earnings per share increased by 4.2% compared to the prior year. Solid growth above 10% suggests healthy business momentum.
Q: Is TERADYNE, INC buying back stock?
TERADYNE, INC (TER) repurchased $702.1 million of stock over the trailing twelve months. This represents a buyback yield of 2.3%.
Q: How does TERADYNE, INC compare to competitors in Technology?
Compared to other companies in Technology, TERADYNE, INC (TER) shows: ROIC of 19.9% is above the sector median of 5.2% (Top 19%). FCF margin of 14.1% exceeds the sector median of 9.1% (Top 39% of sector). Gross margin at 58.2% is 6.4 percentage points higher than sector peers. These rankings are based on MetricDuck's analysis of all Technology companies with available SEC filings.
Q: What warning signs should I watch for with TERADYNE, INC?
TERADYNE, INC (TER) shows no major financial warning signs based on current metrics. However, investors should always monitor: 1) Margin compression trends, 2) Cash flow consistency, 3) Debt levels relative to cash generation, and 4) Changes in competitive positioning.
Data Source: Data sourced from 10-Q filed 2025-10-30. TTM metrics as of Q4 2025.
Methodology: Financial metrics calculated from SEC 10-K and 10-Q filings using standardized formulas. Sector comparisons use peer group based on SIC code.
Scope: This analysis covers SEC filing fundamentals — profitability, cash flow, balance sheet, and valuation metrics. For analyst estimates and price targets, consult sell-side research.
This analysis is for informational purposes only and does not constitute investment advice.