Teradyne (TER) Outpaces Stock Market Gains: What You Should Know

In the latest close session, Teradyne (TER) was up +1.88% at $315.43. The stock exceeded the S&P 500, which registered a gain of 0.44% for the day. Elsewhere, the Dow saw an upswing of 0.36%, while the tech-heavy Nasdaq appreciated by 0.54%.

Coming into today, shares of the maker of wireless products, data storage and equipment to test semiconductors had gained 13.39% in the past month. In that same time, the Computer and Technology sector lost 2.47%, while the S&P 500 lost 3.31%.

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 $1.94 per share, which would represent year-over-year growth of 158.67%. Simultaneously, our latest consensus estimate expects the revenue to be $1.2 billion, showing a 75.28% escalation compared to the year-ago quarter.

For the full year, the Zacks Consensus Estimates project earnings of $5.91 per share and a revenue of $4.12 billion, demonstrating changes of +49.24% and +29%, respectively, from the preceding year.

Any recent changes to analyst estimates for Teradyne should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. Teradyne is currently a Zacks Rank #1 (Strong Buy).

Looking at valuation, Teradyne is presently trading at a Forward P/E ratio of 52.38. This expresses a premium compared to the average Forward P/E of 22.44 of its industry.

We can additionally observe that TER currently boasts a PEG ratio of 1.92. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. By the end of yesterday's trading, the Electronics - Miscellaneous Products industry had an average PEG ratio of 1.6.

The Electronics - Miscellaneous Products industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 36, which puts it in the top 15% of all 250+ industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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Teradyne, Inc. (TER): Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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