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It's been a mediocre week for Teradyne, Inc. (NASDAQ:TER) shareholders, with the stock dropping 14% to US$120 in the week since its latest annual results. Results look mixed - while revenue fell marginally short of analyst estimates at US$3.0b, statutory earnings beat expectations 4.5%, with Teradyne reporting profits of US$4.28 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Teradyne after the latest results.
After the latest results, the 15 analysts covering Teradyne are now predicting revenues of US$3.28b in 2021. If met, this would reflect a solid 8.8% improvement in sales compared to the last 12 months. Per-share earnings are expected to rise 7.9% to US$4.62. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$3.27b and earnings per share (EPS) of US$4.54 in 2021. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 8.0% to US$134. It looks as though they previously had some doubts over whether the business would live up to their expectations. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Teradyne at US$165 per share, while the most bearish prices it at US$87.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Teradyne's past performance and to peers in the same industry. We can infer from the latest estimates that forecasts expect a continuation of Teradyne'shistorical trends, as next year's 8.8% revenue growth is roughly in line with 10% annual revenue growth over the past five years. Compare this with the wider industry, which analyst estimates (in aggregate) suggest will see revenues grow 9.9% next year. It's clear that while Teradyne's revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the industry itself.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Happily, there were no real changes to sales forecasts, with the business still expected to grow in line with the overall industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Teradyne going out to 2023, and you can see them free on our platform here..
Plus, you should also learn about the 2 warning signs we've spotted with Teradyne .
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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