In the latest close session, Teradyne (TER) was up +2.46% at $137.64. The stock outperformed the S&P 500, which registered a daily gain of 0.41%. Meanwhile, the Dow experienced a rise of 0.18%, and the technology-dominated Nasdaq saw an increase of 0.31%.
The stock of maker of wireless products, data storage and equipment to test semiconductors has risen by 13.61% in the past month, leading the Computer and Technology sector's gain of 7.63% and the S&P 500's gain of 3.15%.
Market participants will be closely following the financial results of Teradyne in its upcoming release. On that day, Teradyne is projected to report earnings of $0.78 per share, which would represent a year-over-year decline of 13.33%. In the meantime, our current consensus estimate forecasts the revenue to be $744.48 million, indicating a 0.97% growth compared to the corresponding quarter of the prior year.
TER's full-year Zacks Consensus Estimates are calling for earnings of $3.13 per share and revenue of $2.89 billion. These results would represent year-over-year changes of -2.8% and +2.61%, respectively.
Investors should also take note of any recent adjustments to analyst estimates for Teradyne. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the business and profitability.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. Right now, Teradyne possesses a Zacks Rank of #4 (Sell).
Investors should also note Teradyne's current valuation metrics, including its Forward P/E ratio of 42.9. This indicates a premium in contrast to its industry's Forward P/E of 19.84.
We can also see that TER currently has a PEG ratio of 2.83. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The Electronics - Miscellaneous Products industry currently had an average PEG ratio of 1.85 as of yesterday's close.
The Electronics - Miscellaneous Products industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 72, this industry ranks in the top 30% of all industries, numbering over 250.
The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
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Teradyne, Inc. (TER): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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