On Friday, Evercore ISI up to date its outlook on Teradyne (NASDAQ:), lowering the worth goal to $135 from the earlier $145, whereas nonetheless sustaining an Outperform score on the inventory. The adjustment follows Teradyne’s reported earnings for the September quarter, which surpassed expectations as a result of greater revenues and improved margins.
This success was attributed to strong efficiency in Excessive Bandwidth (NASDAQ:) Reminiscence (HBM) and Compute segments, which embody customized silicon and networking revenues.
The corporate’s income forecast for the December quarter is on observe, with earnings per share (EPS) anticipated to be greater owing to better-than-expected margins. Evercore ISI has subsequently raised its 2024 income development outlook for Teradyne to five% year-over-year, a revision from the sooner projection of low-single-digit development. This improve is essentially pushed by the power of AI-driven HBM and networking testers.
Along with the income development forecast, Evercore ISI has elevated its 2024 System-on-Chip (SOC) Whole Addressable Market (TAM) estimate for Teradyne to $4.2 billion, up from the prior estimate of $3.9 billion.
This adjustment displays an anticipated rise within the Compute phase’s TAM by $200 million to $1.8 billion, a rise within the Industrial phase’s TAM by $100 million to $400 million, and a development within the Reminiscence phase’s TAM by $150 million to $1.4 billion.
The revised worth goal and the maintained Outperform score recommend that Evercore ISI continues to view Teradyne positively, regardless of the adjustment within the worth goal. Teradyne’s sturdy efficiency in key expertise areas appears to be driving the corporate’s development prospects and market potential as mirrored within the up to date monetary metrics and market measurement estimates.
In different latest information, Teradyne Included reported strong third-quarter outcomes, with gross sales surpassing steering at $737 million and non-GAAP earnings per share at $0.90. The corporate’s Semi-Check phase confirmed power, significantly within the Reminiscence Check enterprise, and the 2024 Whole Addressable Market projections for the SoC phase have been elevated to $1.8 billion, with Reminiscence at $1.4 billion.
Regardless of a decline in wi-fi testing revenues and a weak general reminiscence market, the corporate expects the Robotics enterprise to develop 50% sequentially in This autumn 2024.
CEO Greg Smith and CFO Sanjay Mehta led the earnings name, offering insights into Teradyne’s monetary efficiency and market outlook. They highlighted secure robotics income and an upward revision of the semiconductor Automated Check Gear Whole Addressable Marketplace for 2024. This autumn gross sales are projected between $710 million and $760 million, with non-GAAP earnings per share between $0.80 and $0.97.
These are latest developments for Teradyne, which has seen file income within the Reminiscence Check enterprise as a result of excessive demand for HBM DRAM. The corporate’s fairness funding in Technoprobe additionally contributed to the monetary outcomes. Trying forward, Smith addressed the projected gross sales development of 20% to 25% for 2025, citing increasing demand in AI Compute and the Chinese language market.
InvestingPro Insights
Teradyne’s latest efficiency and Evercore ISI’s up to date outlook are additional supported by real-time information from InvestingPro. The corporate’s market capitalization stands at $18.07 billion, reflecting its vital presence within the semiconductor testing trade. Teradyne’s P/E ratio of 39.61 signifies that traders are keen to pay a premium for the corporate’s earnings, probably as a result of its sturdy place in development areas like AI-driven HBM and networking testers.
InvestingPro Suggestions spotlight that Teradyne has maintained dividend funds for 11 consecutive years, demonstrating monetary stability. That is significantly noteworthy given the corporate’s involvement within the quickly evolving tech sector. Moreover, Teradyne’s liquid belongings exceed short-term obligations, suggesting a robust monetary place that aligns with Evercore ISI’s optimistic outlook.
It is price noting that whereas the inventory has taken a success during the last week, with a 1-week worth complete return of -12.15%, Teradyne nonetheless boasts a 26.47% return over the previous 12 months. This volatility could current a chance for traders, as one InvestingPro Tip suggests the inventory might be in oversold territory based mostly on its RSI.
For readers interested by a deeper evaluation, InvestingPro affords 15 extra ideas for Teradyne, offering a complete view of the corporate’s monetary well being and market place.
This text was generated with the assist of AI and reviewed by an editor. For extra data see our T&C.
