Teradyne (TER) Up 7.5% Since Last Earnings Report: Can It Continue?

It has been about a month since the last earnings report for Teradyne (TER). Shares have added about 7.5% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Teradyne due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important drivers.

Teradyne Q4 Earnings Top Estimates, Revenues Up Y/Y

Teradyne reported fourth-quarter 2025 non-GAAP earnings of $1.80 per share, which beat the Zacks Consensus Estimate by 32.22% and surged 89.5% year over year.

Revenues of $1.08 billion beat the Zacks Consensus Estimate by 11.82% and increased 43.7% year over year.

TER’s Q4 Top-line Details

Revenues from Semiconductor Test platforms, Robotics, and Product Test were $883 million (81.6% of total revenues), $89 million (8.2%), and $110 million (10.2%), respectively.
In the fourth quarter, Teradyne reported a non-GAAP gross margin of 57.3%, which contracted 210 basis points (bps) year over year.

In the reported quarter, selling and administrative expenses increased 5.7% year over year to $164.7 million. As a percentage of revenues, selling and marketing expenses were 15.2%, down 550 bps year over year.

Engineering and development expenses increased 11.6% year over year to $143.3 million. As a percentage of revenues, engineering and development expenses were 13.2%, down 380 bps year over year.

Non-GAAP Operating income increased 92.4% year over year to $314 million. As a percentage of revenues, the operating margin contracted 730 bps on a year-over-year basis to 29%.

TER’s Balance Sheet & Cash Flow

As of Dec. 31, 2025, Teradyne’s cash and cash equivalents (including marketable securities) were $321.9 million, lower than $297.7 million as of Sept. 28, 2025.

In the reported quarter, net cash provided by operating activities was $281 million.

TER’s Q1 Guidance

For the first quarter of 2026, Teradyne expects revenues between $1,150 million and $1,250 million.

Non-GAAP earnings are expected to be between $1.89 and $2.25 per share.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a upward trend in fresh estimates.

The consensus estimate has shifted 65.21% due to these changes.

VGM Scores

Currently, Teradyne has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. However, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for value investors.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Teradyne has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.

Performance of an Industry Player

Teradyne belongs to the Zacks Electronics - Miscellaneous Products industry. Another stock from the same industry, KLA (KLAC), has gained 6.3% over the past month. More than a month has passed since the company reported results for the quarter ended December 2025.

KLA reported revenues of $3.3 billion in the last reported quarter, representing a year-over-year change of +7.2%. EPS of $8.85 for the same period compares with $8.20 a year ago.

For the current quarter, KLA is expected to post earnings of $9.12 per share, indicating a change of +8.4% from the year-ago quarter. The Zacks Consensus Estimate has changed +0% over the last 30 days.

KLA has a Zacks Rank #2 (Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.

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