Teradyne Slips to 303rd in Trading Volume Despite Strong Q1 Performance

On June 25, 2025, Teradyne (TER) experienced a significant decline, with its trading volume reaching $327 million, a 38.61% decrease from the previous day. This placed Teradyne at the 303rd position in terms of trading volume for the day. The stock price of Teradyne dropped by 0.21%.

Cantor Fitzgerald analyst C.J. Muse maintained a buy rating for Teradyne, adjusting the target price from $90 to $105. This revision comes amid positive industry evaluations, particularly in the Wafer Fab Equipment sector, which is seeing growth driven by developments in China. The analyst noted an upward trend in consensus estimates for the sector, with minimal impact from tariff-related concerns and exaggerated regulatory fears in China.

Teradyne's first-quarter financial performance was robust, with revenue reaching $686 million, exceeding the high-end of guidance. The company's non-GAAP earnings per share (EPS) were $0.75, surpassing the high-end guide of $0.68. The non-GAAP gross margin stood at 60.6%, driven by a favorable product mix. Non-GAAP operating expenses were $275 million, up year-over-year but down sequentially. The non-GAAP operating profit margin was 20.5%.

In terms of segment performance, Semi Test Revenue was $543 million, with System-on-Chip (SoC) contributing $406 million, Memory at $109 million, and Integrated Systems Test (IST) at $27 million. Product Test Revenue was $74 million, down 4% year-over-year, while Wireless Test Revenue was $29 million, up 20% year-over-year. Robotics Revenue was $69 million, declining both sequentially and year-over-year. Free cash flow for the quarter was $98 million, and cash and marketable securities totaled $622 million at the end of the quarter.

Looking ahead, Teradyne provided guidance for the second quarter, expecting sales between $610 million and $680 million, with a gross margin estimated at 56.5% to 57.5%. The non-GAAP EPS guidance is in the range of $0.41 to $0.64. The company also increased its share buyback target from $400 million in 2025 to up to $1 billion through the end of 2026, reflecting confidence in its long-term plans and free cash flow generation.

Despite the positive financial performance, Teradyne faces challenges such as limited visibility beyond the second quarter and order pushouts due to trade policy and customer uncertainty around end market demand, particularly in the auto and industrial segments. The wireless test end market for Teradyne's LitePoint business has been weak since 2023, and revenue in the Robotics division declined both sequentially and year-over-year, with an operating loss of $22 million. The impact of tariffs on end market demand remains a concern, with potential effects on mobile, automotive, and industrial end markets.