Stock Analysis | Teradyne Outlook - A Mixed Picture Amid Strong Fundamentals and Bearish Technical Signals

Market Snapshot

Headline Takeaway: Teradyne (TER) has seen a recent price rise of 4.87%, but technical indicators remain weak, and analysts show mixed views on the stock.

News Highlights

• McKinsey weighs in on tariffs and chip supply chains: New research from McKinsey & Co explores U.S. tariffs policy and its potential impact on the semiconductors sector. The analysis highlights a shifting landscape, where regulatory changes could affect supply chains and industry players like Teradyne.
• Japan proposes cooperation on rare earths and semiconductors: Japan is working with the U.S. to strengthen collaboration on rare earths and semiconductor supply chains, potentially reducing reliance on China. This could offer long-term tailwinds for semiconductor firms like Teradyne.
• indie Semiconductor's financial performance: indie Semiconductor (INDI) has reported a negative return on invested capital (ROIC) of -18.68%. While this is not directly related to Teradyne, it highlights broader industry challenges in profitability.

Analyst Views & Fundamentals

Analysts have issued a range of opinions in the last 20 days. The simple average rating is 3.80, while the performance-weighted rating is 4.62, indicating a generally optimistic outlook when factoring in historical performance.

There is rating dispersion, with three "Neutral" and two "Strong Buy" ratings. This mix of views suggests a degree of uncertainty among analysts.

The current price trend of 4.87% aligns with the weighted market expectations, implying that the market's optimistic tilt is reflected in recent price action.

Key Fundamental Factors

• Net cash flow from operating activities per share (YoY growth rate): -8.36% (internal diagnostic score: 1 out of 10) – weak performance.
• Basic earnings per share (YoY growth rate): -31.68% (internal diagnostic score: 3 out of 10) – significant decline.
• Total profit (YoY growth rate): -30.18% (internal diagnostic score: 3 out of 10) – another weak indicator.
• Diluted earnings per share (YoY growth rate): -28.57% (internal diagnostic score: 3 out of 10) – also showing a drop.
• Cash-UP: 6.35% (internal diagnostic score: 4 out of 10) – better than most, but still modest.
• Cost of sales ratio: 41.06% (internal diagnostic score: 3 out of 10) – high, suggesting pressure on margins.

Money-Flow Trends

Big-money investors are currently showing negative sentiment, with large and extra-large inflow ratios at 50.78% and 36.26% respectively. Meanwhile, retail and small investors are more optimistic, with small and medium inflow ratios at 52.01% and 51.70%.

The fund-flow score is 7.48 (internal diagnostic score: good), reflecting positive inflows from smaller investors despite the bearish stance from institutional players.

Key Technical Signals

The technical picture for Teradyne is weak, with a technical score of 2.46 (internal diagnostic score: poor). The trend suggests it's better to avoid the stock for now, as bearish indicators dominate:

• MACD Death Cross: internal diagnostic score: 3.16 – a neutral bias with historical average return of 0.60%.
• WR Overbought: internal diagnostic score: 1 – a strong bearish signal with a 34.78% win rate.
• Long Lower Shadow: internal diagnostic score: 1 – another bearish signal with a win rate of 16.67%.
• Bearish Engulfing: internal diagnostic score: 4.67 – a neutral rise, with a 50% win rate.

Key chart patterns over the last five days include WR Overbought and MACD Death Cross on 2025-08-20, and WR Overbought on 2025-08-22. These fresh signals reinforce the bearish outlook.

The technical indicators show that the market is in a weak state, with 3 bearish indicators versus 0 bullish ones. This suggests a high risk of further price decline.

Conclusion

Teradyne has solid fundamentals, particularly in cash flow and profitability, but the technical outlook is unattractive. With analysts divided and big money moving out, investors may want to consider waiting for a pull-back before entering the stock. A clearer technical setup, potentially after earnings, could offer a more attractive entry point.