Is Teradyne Stock Outperforming the Nasdaq?

North Reading, Massachusetts-based Teradyne, Inc. (TER) designs, develops, manufactures, and sells automated test systems and robotics products worldwide. With a market cap of $20.3 billion, Teradyne operates through Semiconductor Test, System Test, Robotics, and Wireless Test segments.

Companies worth $10 billion or more are generally described as "large-cap stocks," Teradyne fits right into that category, with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance in the semiconductor equipment & materials industry. It serves several high-profile customers, including Samsung, Qualcomm (QCOM), Intel (INTC), Analog Devices (ADI), and Texas Instruments (TXN).

Teradyne touched its 52-week high of $163.21 on July 16 and is currently trading 21.7% below that peak. TER has dipped 15.7% over the past three months lagging behind the Nasdaq Composite’s ($NASX) 1.6% decline during the same time frame.

However, over the longer term, Teradyne has outperformed NASX. TER gained 32.1% over the past 52 weeks and 17.8% in 2024, outpacing NASX’s 28.2% gains over the past year and 17.1% returns on a YTD basis.

To confirm the longer-term bullish trend and recent downturn, TER has traded above its 200-day moving average since mid-December with slight fluctuations and below its 50-day moving average since late July.

TER stock has exhibited significant volatility over the past period and has a 60-month beta of 1.49. The recent decline in TER stock prices can be partly attributed to the broader downturn in tech stocks over the past few weeks.

Nevertheless, Teradyne has consistently delivered better-than-expected results in recent quarters. In the latest quarterly report, the company exceeded both management guidance and Wall Street expectations. Its net revenues for Q2 rose by 6.6% annually to $729.9 million. This growth was primarily driven by a 14% year over year increase in Semiconductor Test revenues, hitting $543 million, fueled by continued strength in memory and a recovery in demand for SoC.

Furthermore, Teradyne’s net income surged by 55.2%, totaling $186.3 million. The company’s adjusted EPS of $0.86 surpassed consensus estimates by 13.2%.

Teradyne’s competitor, Keysight Technologies, Inc. (KEYS), has underperformed TER over the past year. KEYS gained 13.2% over the past year and has dipped 5.6% on a YTD basis.

Among the 16 analysts covering the TER stock, the consensus rating is a “Moderate Buy.” The mean price target of $146.81 suggests a potential upside of 14.8% from current price levels.

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