Teradyne, Inc.
Teradyne, Inc. Fundamental Analysis
Teradyne, Inc. (TER) shows moderate financial fundamentals with a PE ratio of 80.90, profit margin of 17.37%, and ROE of 19.88%. The company generates $3.2B in annual revenue with moderate year-over-year growth of 5.36%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 70.1/100 based on profitability, valuation, growth, and balance sheet metrics. The B grade reflects solid fundamentals with room for improvement in valuation or growth.
Fundamental Health Score
We analyze TER's fundamental strength across five key dimensions:
Efficiency Score
ExcellentTER demonstrates superior asset utilization.
Valuation Score
WeakTER trades at a premium to fair value.
Growth Score
ExcellentTER delivers strong and consistent growth momentum.
Financial Health Score
ExcellentTER maintains a strong and stable balance sheet.
Profitability Score
ExcellentTER achieves industry-leading margins.
Key Financial Metrics
Is TER Expensive or Cheap?
P/E Ratio
TER trades at 80.90 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, TER's PEG of 3.01 indicates potential overvaluation.
Price to Book
The market values Teradyne, Inc. at 16.03 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 57.44 times EBITDA. This signals the market has high growth expectations.
How Well Does TER Make Money?
Net Profit Margin
For every $100 in sales, Teradyne, Inc. keeps $17.37 as profit after all expenses.
Operating Margin
Core operations generate 20.91 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $19.88 in profit for every $100 of shareholder equity.
ROA
Teradyne, Inc. generates $13.29 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Teradyne, Inc. produces operating cash flow of $675.03M, showing steady but balanced cash generation.
Free Cash Flow
Teradyne, Inc. generates strong free cash flow of $450.82M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $2.88 in free cash annually.
FCF Yield
TER converts 1.01% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
80.90
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
3.006
vs 25 benchmark
P/B Ratio
Price to book value ratio
16.03
vs 25 benchmark
P/S Ratio
Price to sales ratio
14.06
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.12
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.76
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.20
vs 25 benchmark
ROA
Return on assets percentage
0.13
vs 25 benchmark
ROCE
Return on capital employed
0.22
vs 25 benchmark
How TER Stacks Against Its Sector Peers
| Metric | TER Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 80.90 | 34.43 | Worse (Expensive) |
| ROE | 19.88% | 1135.00% | Weak |
| Net Margin | 17.37% | -134808.00% (disorted) | Strong |
| Debt/Equity | 0.12 | 7.92 | Strong (Low Leverage) |
| Current Ratio | 1.76 | 5.77 | Neutral |
| ROA | 13.29% | -310795.00% (disorted) | Strong |
TER outperforms its industry in 3 out of 6 key metrics, particularly excelling in Net Margin, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Teradyne, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
31.63%
Industry Style: Growth, Innovation, High Beta
High GrowthEPS CAGR
24.30%
Industry Style: Growth, Innovation, High Beta
High GrowthFCF CAGR
24.42%
Industry Style: Growth, Innovation, High Beta
High Growth