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Why Is Teradyne (TER) Up 3.9% Since Last Earnings Report?

It has been about a month since the last earnings report for Teradyne (TER). Shares have added about 3.9% in that time frame, underperforming 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 most recent earnings report in order to get a better handle on the important drivers.

Teradyne Q4 Earnings Top Estimates, Revenues Fall Y/Y

Teradyne reported fourth-quarter 2023 earnings of 79 cents per share, which surpassed the Zacks Consensus Estimate by 9.72% but declined 14.1% year over year.

Revenues of $671 million lagged the Zacks Consensus Estimate by 0.85% and declined 8.3% year over year.

Quarter Details

Revenues from Semiconductor Test platforms, System Test business, Wireless Test business and Robotics were $431 million (64.2% of total revenues), $86 million (12.8%), $25 million (3.7%) and $129 million (19.2%), respectively.

Robotics revenues increased 50% sequentially and 17% year over year.

Gross margin was 56.6%, which contracted 90 basis points (bps) year over year.

In the reported quarter, selling and administrative expenses decreased 0.3% year over year to $142.3 million. As a percentage of revenues, selling and marketing expenses were 21.2%, up 170 bps year over year.

Engineering and development expenses decreased 6.1% year over year to $102.2 million. As a percentage of revenues, engineering and development expenses increased 40 bps on a year-over-year basis to 15.2%.

Balance Sheet & Cash Flow

As of Dec 31, 2023, Teradyne’s cash and cash equivalents (including marketable securities) were $819.7 million, lower than $716.5 million as of Oct 1, 2023.

Net cash provided by operating activities was $248.8 million for the fourth quarter, up from $174.3 million in the prior quarter.

Guidance

For the first quarter of 2024, Teradyne expects revenues between $540 million and $590 million. Non-GAAP earnings are expected between 22 cents and 38 cents per share.

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How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates revision.

The consensus estimate has shifted -39.37% due to these changes.

VGM Scores

At this time, Teradyne has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.

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 broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Teradyne has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.

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

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