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Teradyne (TER) Gains As Market Dips: What You Should Know

Zacks Equity Research
·3 mins read

Teradyne (TER) closed at $76.92 in the latest trading session, marking a +0.72% move from the prior day. This move outpaced the S&P 500's daily loss of 1.16%. Meanwhile, the Dow lost 1.84%, and the Nasdaq, a tech-heavy index, lost 0.13%.

Prior to today's trading, shares of the maker of wireless products, data storage and equipment to test semiconductors had lost 13.93% over the past month. This has lagged the Computer and Technology sector's loss of 2.66% and the S&P 500's loss of 1.96% in that time.

Investors will be hoping for strength from TER as it approaches its next earnings release. In that report, analysts expect TER to post earnings of $1.11 per share. This would mark year-over-year growth of 44.16%. Our most recent consensus estimate is calling for quarterly revenue of $785.96 million, up 35.03% from the year-ago period.

TER's full-year Zacks Consensus Estimates are calling for earnings of $3.87 per share and revenue of $2.85 billion. These results would represent year-over-year changes of +35.31% and +23.98%, respectively.

Investors should also note any recent changes to analyst estimates for TER. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. TER is holding a Zacks Rank of #2 (Buy) right now.

Looking at its valuation, TER is holding a Forward P/E ratio of 19.73. This represents a discount compared to its industry's average Forward P/E of 30.83.

It is also worth noting that TER currently has a PEG ratio of 1.18. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Electronics - Testing Equipment stocks are, on average, holding a PEG ratio of 3.08 based on yesterday's closing prices.

The Electronics - Testing Equipment industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 191, which puts it in the bottom 25% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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Zacks Investment Research