Teradata (TDC) has posted four straight positive earnings surprises and is now a Zacks #1 Rank (Strong Buy).
Teradata Corporation provides analytic data solutions worldwide. The company offers various data warehousing solutions is comprised of software, hardware and related business consulting and support services. Further, the company provides consulting services, such as data warehousing business impact modeling, design, architecture, installation, implementation, and optimization consulting services. Teradata Corporation was founded in 1979 and is headquartered in Dayton, Ohio.
Teradata Tops Estimates in Four Straight Quarters
Teradata topped the Zacks Consensus Estimate in each of the last four quarters. The average beat has been $0.04 above the Zacks Consensus Estimate which works out to be an average beat of 7.4%. As a result of the positive earnings surprises, the stock has moved higher by an average of 1.5% following the earnings releases.
The largest price movement in the stock came the day after the company reported the December 2011 quarter. Teradata beat the topline estimate of $641 million by posting revenues of $673 million. EPS of $0.63 was $0.04 higher than the $0.59 Zacks Consensus Estimate and the stock moved higher by about 7%.
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Teradata Most Recent Reported Earnings
On May 3, 2012 Teradata reported revenue of $613 million, about $28 million more than the Zacks Consensus Estimate and up from $506 million reported in year ago quarter, an increase of of 21%. Earnings per share came in at $0.56, $0.04 higher than the Zacks Consensus Estimate of $0.52. The beat of 7.7% helped the stock rise 1.3% in the session following the earnings release.
Teradata Sees Estimates Moving Higher
Teradata has seen earnings estimates move higher following the recent positive earnings surprise. The Zacks Consensus Estimate for 2012 was as low as a loss of $2.44 in January 2012 and has since moved higher to $2.53.
Teradata carries a valuation that is almost double the industry average for most of the major metrics that aggressive growth investors look at. The trailing twelve months PE multiple of 28x is just under twice the industry average of 15x. The forward PE multiple of 25x is more than twice the industry average of 10x. Similarly, the more conservative measure of price to book shows 6.7x mulitple is higher than 3.9x multiple and the price to sales multiple of 4.5x is more than double the industry average of 2.2x.
A quick look at the chart shows a stock that was a little late to the rally that started for most stocks in October and November of 2011. A recent spike above $77 per share was a high point and the stock has since sold off somewhat dramatically following the most recent earnings report. As the market consolidates, Teradata is likely to do so as well, but its lower price and excellent track record of growth makes current levels a good entry point for an aggressive growth investment. Teradata is a Zacks #1 Rank (Strong Buy).
Brian Bolan is the Aggressive Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the Zacks Home Run Investor service
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