Teradyne Outlook - Technical Neutrality, Strong Bullish Fundamentals, and Mixed Analyst Signals

1. Market Snapshot: Price Up, Technical Signal Split

Headline takeaway: Teradyne (TER) rose 1.56% recently, but technical indicators remain neutral, suggesting a wait-and-see stance with an internal diagnostic score of 5.33 (0-10).

2. News Highlights: Supply Chains, Semiconductors, and ETF Outflows

1. McKinsey on Tariffs and Chip Supply Chains: Recent analysis from McKinsey suggests that US tariff policies could have lasting effects on the semiconductor industry, especially given the ongoing legal uncertainty. This could impact Teradyne’s long-term exposure to global chip manufacturing trends.

2. US Semiconductors ETF SOXX Faces $750M Outflow: A significant outflow from the SOXX ETF in May 2025 reflects shifting investor sentiment toward semiconductor equities. While this doesn’t directly affect Teradyne’s fundamentals, it could pressure broader sector momentum.

3. Japan-U.S. Rare Earth and Semiconductor Cooperation: Japan is reportedly preparing proposals for enhanced cooperation with the U.S. in rare earth and semiconductor production. This could indirectly boost demand for Teradyne’s semiconductor testing equipment as supply chains shift toward geopolitical stability.

3. Analyst Views & Fundamentals: High-Quality Analysts and Mixed Ratings

Analysts remain mixed, with a simple average rating of 3.80 and a performance-weighted score of 4.62, indicating generally optimistic but diverging views. The price has risen in recent days, aligning with the weighted average of expectations, but the rating dispersion suggests no clear consensus. Recent ratings include two “Strong Buy” and three “Neutral” from analysts at UBS, Morgan Stanley, and others.

Key fundamental factors and model scores:

• Net profit growth YoY: -29.23% (score: 3.06)
• Operating cash flow per share YoY: -93.77% (score: 1.00)
• EV/EBIT: 91.39 (score: 3.47)
• Gross profit margin (GPM): 57.23% (score: 3.39)
• Accounts receivable turnover ratio: 2.96 (score: 0.00)
• CFOA (Cash flow from operating activities): 4.84% (score: 3.24)
• Interest coverage ratio: -89.28% (score: 1.89)
• Cash to Market Value (Cash-MV): -0.71 (score: 1.25)

While some factors like GPM and EV/EBIT show strength, others—like declining net profit and operating cash flow—weigh on the fundamentals. The overall fundamental score is 3.47 (0-10), suggesting modest long-term potential but with caution warranted.

4. Money-Flow Trends: Big Money and Retailers Both Buying

Big money continues to show strength, with the overall inflow ratio at 50.30% and positive trends across most segments. Notably:

• Extra-large institutional flows: Negative trend, but inflow ratio at 49.97%.
• Large, medium, and small flows: All show positive trends, with inflow ratios ranging from 50.06% to 52.70%.

This suggests continued broad-based buying interest, with both institutional and retail investors showing cautious optimism. The fund-flow score is 7.66 (0-10), indicating good inflow activity and alignment with the recent price rise.

5. Key Technical Signals: Neutral Signal, Strong Dividend-Related Optimism

Technical indicators are mixed but leaning toward neutrality. The internal diagnostic score is 5.33 (0-10), with a balanced mix of bullish and bearish signals:

• Ex-Dividend Date: Score of 7.60 – strong bullish signal.
• Dividend Record Date: Score of 7.60 – another strong bullish factor.
• Bullish Engulfing: Score of 7.54 – suggests a reversal pattern to the upside.
• WR Overbought: Score of 1.00 – bearish warning, though not yet a sell signal.
• MACD Death Cross: Score of 3.55 – neutral but could hint at a bearish bias.
• Bearish Engulfing: Score of 4.67 – neutral to slightly bearish.

Recent chart patterns include a Bullish Engulfing on September 2 and a WR Overbought signal multiple times in the last five days. The MACD Death Cross appeared on September 8, which may add short-term uncertainty. Overall, the key technical insight is that the market is in a volatile, directionally unclear state, and traders are advised to monitor changes closely.

6. Conclusion: Watch for a Clear Breakout or Pullback

Teradyne is in a holding pattern technically, with strong fundamental factors and positive money flow suggesting underlying strength. However, mixed analyst ratings and divergent technical signals indicate that the market is waiting for a clearer catalyst—whether from earnings, macroeconomic data, or sector momentum. With a recent internal diagnostic score of 5.33 and mixed signals, we recommend considering a wait-and-see approach, with close attention to the next key chart patterns and earnings reports.