One-glance verdict
Overvalued
$56.40 our estimate vs market $403.20
Wall Street consensus: $374.82 (564.6% higher than our fair-value estimate)
615% above our estimate, beyond the bull case
Fundamentals snapshot
Teradyne, Inc.
TER · NMS · Technology · Semiconductor Equipment & Materials
Current price
$403.20
52-week range
$84.12 - $422.11
Market cap
$63.12B
Balance sheet
Healthy
100.59x Strong cushion
Net cash $163.20M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Revenue grew 18.7% last year.
- Reward Returns 28.7% on equity, ahead of 60% of its peers.
- Risk Stock trades 93.7% above its 5-year average P/E.
- Risk Insider ownership is only 0.3% (peer median: 0.6%).
What this company does
Teradyne, Inc.
Teradyne makes two main things: very complex machines that test semiconductors (the tiny electronic chips that power our world) and robots that help automate factory work. The company earns most of its money selling this testing equipment to chip manufacturers, a crucial step to ensure our phones, cars, and computers work reliably.
How the company got here
Teradyne started in 1960 in a loft above a hot dog stand in Boston. Two MIT classmates, Alex d'Arbeloff and Nick DeWolf, saw that electronics companies needed a better way to make sure their tiny components worked correctly. Their first big idea was to automate the testing of electronic parts like diodes right on the factory floor, which was a major innovation at the time. Over the years, they became a leader in creating automated test equipment for the growing semiconductor industry and later expanded into robotics by acquiring companies like Universal Robots.
What it actually does
Think about the complex chips inside your smartphone, car, or computer; Teradyne makes the sophisticated machines that test these chips to ensure they work perfectly before they ever get to you. Essentially, they are a quality control expert for the electronics industry, helping to prevent faulty products from leaving the factory. In addition to testing, the company also builds industrial robots, including robotic arms and self-driving mobile robots, that help automate tasks in factories and warehouses.
Semiconductor Test
This is Teradyne's largest and original business, making up the majority of its sales. It creates incredibly precise machines that test the performance and quality of semiconductors (the tiny chips that power all modern electronics) at different stages of production. Companies that design and manufacture chips for everything from cars and smartphones to data centers pay Teradyne for these systems to avoid costly defects. This segment ensures that the building blocks of our digital world are reliable.
Robotics
This is a newer but growing part of Teradyne's business. It builds and sells collaborative robotic arms (often called 'cobots') and autonomous mobile robots that work alongside people in factories and warehouses to automate tasks. For example, their robots might be used for moving materials from one place to another or helping with assembly line jobs. Customers in manufacturing and logistics buy these robots to increase efficiency (how much they can produce in a certain time) and improve worker safety.
What management is betting on now
The company is heavily focused on the growing demand for testing more powerful and complex chips used for artificial intelligence (AI). As AI becomes more common, the chips that run it require more intense testing, which is good for Teradyne's main business. They are also investing in expanding their robotics division, particularly by making their robots smarter with AI to handle more complex tasks in manufacturing and logistics. Additionally, Teradyne is moving into new test markets, such as those for optical technology used in data centers, through strategic acquisitions (buying other companies to gain their technology or market access).
Price history
How the share price has moved
—
Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q2
$171.22M
FY2024 Q3
$114.43M
FY2024 Q4
$225.17M
FY2025 Q1
$97.62M
FY2025 Q2
$131.68M
FY2025 Q3
$2.36M
FY2025 Q4
$218.75M
FY2026 Q1
$200.39M
Revenue
$1.28B
Net income
$398.91M
Diluted EPS
2.53
Operating cash flow
$265.12M
Free cash flow
$200.39M
Fetching…
Sources
Revenue
$1.08B
Net income
$257.22M
Diluted EPS
1.62
Operating cash flow
$281.64M
Free cash flow
$218.75M
Fetching…
Sources
Revenue
$769.21M
Net income
$119.56M
Diluted EPS
0.75
Operating cash flow
$49.05M
Free cash flow
$2.36M
Fetching…
Sources
Revenue
$651.80M
Net income
$78.37M
Diluted EPS
0.49
Operating cash flow
$182.09M
Free cash flow
$131.68M
Fetching…
Sources
Revenue
$685.68M
Net income
$98.90M
Diluted EPS
0.61
Operating cash flow
$161.64M
Free cash flow
$97.62M
Fetching…
Sources
Revenue
$752.88M
Net income
$146.25M
Diluted EPS
0.89
Operating cash flow
$282.56M
Free cash flow
$225.17M
Fetching…
Sources
Revenue
$737.30M
Net income
$145.65M
Diluted EPS
0.89
Operating cash flow
$166.27M
Free cash flow
$114.43M
Fetching…
Sources
Revenue
$729.88M
Net income
$186.27M
Diluted EPS
1.14
Operating cash flow
$216.07M
Free cash flow
$171.22M
Fetching…
Sources
Is it cheap or expensive?
Fair value $56.40 vs current price $403.20
Wall Street consensus is the average analyst price target: $374.82 (564.6% higher than our fair-value estimate).
Our most-likely fair value is $56.40 a share — about 86.0% below today's price of $403.20, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Healthy
Net cash $163.2M - more cash than debt. Interest coverage 100.6x.
Net debt
$-163.20M
Interest coverage
100.59x
Teradyne, Inc.'s profit covers its interest bill about 100.6 times over. which is stronger than most peers shown here and 1 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Healthy
Worse cushion
Baseline
Better cushion
TER
BASELINE
Teradyne, Inc.
Total debt $82.40M Interest coverage 100.59x This is the baseline the peer rows are being compared against.
Total debt $6.15B Interest coverage 16.59x -84% vs TER Carries about 6.1x less debt cushion than TER.
Total debt $31.89M Interest coverage 115.35x +15% vs TER Has roughly the same debt cushion as TER.
Total debt $4.29B Interest coverage 2.48x -98% vs TER Carries about 40.6x less debt cushion than TER.
Total debt $330.08M Interest coverage -29.03x -100% vs TER This peer has almost no interest-payment cushion compared with TER.
What you should know
The case for and against TER
3 Rewards
2 Risks
Rewards
-
Revenue grew 18.7% last year.
-
Returns 28.7% on equity, ahead of 60% of its peers.
-
Free cash flow was positive in 10/10 years.
Risks
-
Stock trades 93.7% above its 5-year average P/E.
-
Insider ownership is only 0.3% (peer median: 0.6%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
74.67x
Forward P/E
42.43x
P/B
22.51x
P/S
16.67x
EV/EBITDA
54.20x
PEG ratio
1.60x
Profitability
How much profit each dollar creates
Gross margin
58.7%
Operating margin
37.6%
Net margin
22.6%
ROE
28.7%
ROA
15.8%
Health
Liquidity and balance-sheet strength
Debt / equity
0.03x
Current ratio
2.15x
Quick ratio
1.34x
Total debt
$82.40M
Total cash
$245.60M
Growth
How the business has been compounding
Revenue TTM
$3.79B
Revenue 5Y CAGR
-3.7%
EPS TTM
5.40
EPS 5Y CAGR
-6.3%
Cash flow
How much cash the business throws off
Operating CF TTM
$777.90M
Free CF TTM
$450.41M
FCF margin
11.9%
Dividend
Shareholder payout
Yield
0.1%
Payout ratio
9.1%
Last ex-div date
2026-05-21