Teradyne (TER) Q4 Earnings: What Can You Expect?

in EARNINGS/INVESTING IDEAS by

Teradyne, Inc. (NASDAQGS:TER) is scheduled to report Q4 earnings results on Wednesday, January 22, 2020, at around 5:00 p.m. Eastern Time (ET). Management plans to hold a conference call to discuss the fourth quarter and fiscal year 2019 results, along with management’s business outlook at 10:00 a.m. ET on Thursday, January 23.

The company is expected to report earnings of $0.79/share on revenue of $610 million. The consensus earnings per share (EPS) of $0.79/share is based on a poll of 13 analysts and represents a growth of 25.4% over the same quarter last year when the company reported earnings of $0.63/share.

The revenue forecast of $610 million based on a poll of 12 analysts implies a year-over-year (YoY) growth of 17.4%. Last year the company reported $519.6 million in revenue for the quarter.

Expected to report EPS growth of $0.16/share for Q4, 2019
Metric Expected Prior Year YoY Change
Revenue $610.02 $519.56 17.4%
EPS $0.79 $0.63 25.4%

Earnings Call Trends

Management has been great at managing analyst expectations historically. The company has a perfect record over the last 8 tracked quarters of exceeding earnings guidance.

What are your expectations from Teradyne for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q3, 2019 $0.69 $0.77 10.8% Beat
Q2, 2019 $0.61 $0.66 8.1% Beat
Q1, 2019 $0.44 $0.54 22.7% Beat
Q4, 2018 $0.50 $0.63 26.0% Beat
Q3, 2018 $0.63 $0.71 12.7% Beat
Q2, 2018 $0.49 $0.59 20.4% Beat
Q1, 2018 $0.42 $0.45 7.1% Beat
Q4, 2017 $0.34 $0.46 35.3% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending September 29, 2019, the stock price reacted by increasing by 1.1%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
2019-10-22 $60.06 $60.70 1.1% Increase
2019-07-23 $46.84 $57.94 23.7% Increase
2019-04-23 $44.85 $47.99 7.0% Increase
2019-01-23 $31.80 $36.04 13.3% Increase

Fundamentals And Technical Analysis

Teradyne is currently trading at $70.29/share, down -0.3% for the day. The company is trading at approximately 99.3% of its 52-week high of $70.82/share. The company’s stock price is up 15.8% since the last earnings report and up 1.5% over the previous week.

The company’s 14 Day Relative Price Index (RSI) of 63.95 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.

NASDAQGS:TER Stock Price Chart Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 24.2x and a forward P/E multiple of 24.7x. Teradyne’s current share price also implies a price-to-book (P/B) multiple of 7.9x. The following table summarizes some other key fundamental ratios:

Data as of January 20, 2020
Metric Value
Last Fiscal Period FY2019.Q3
Period End Date September 29, 2019
Stock Price (Current) $70.29
P/E Ratio 24.2x
P/E Ratio (Fwd) 24.7x
PEG Ratio 2.0
Total Debt to Capital (%) 3.7%
Levered Free Cash Flow $426.6 million
Enterprise Value / EBITDA 18.4x

Source: Finbox

Company Profile: Teradyne, Inc.

Teradyne, Inc. is a large-cap stock with a market capitalization of $11.779 billion and a total enterprise value of $11.299 billion. The company operates in the Information Technology sector and the Semiconductors & Semiconductor Equipment industry.

Teradyne, Inc. designs, develops, manufactures, sells, and supports automatic test equipment worldwide. Its Semiconductor Test segment offers semiconductor test products and services for wafer level and device package testing in automotive, industrial, communications, consumer, computer and electronic games, and other applications. This segment offers FLEX test platform systems; J750 test system to address the highest volume semiconductor devices; Magnum platform that tests memory devices, such as flash memory and DRAM; and ETS platform for use by semiconductor manufacturers, and assembly and test subcontractors in the analog/mixed-signal markets. This segment serves integrated device manufacturers that integrate the fabrication of silicon wafers into their business; fabless companies that outsource the manufacturing of silicon wafers; foundries; and outsourced semiconductor assembly and test providers.

The company’s System Test segment offers defense/aerospace test instrumentation and systems; storage test systems; and circuit-board test and inspection systems. Its Industrial Automation segment provides collaborative robots for manufacturing and light industrial customers.

The company’s Wireless Test segment provides test solutions for use in the development and manufacture of wireless devices, smartphones, tablets, notebooks, laptops, peripherals, and Internet-of-Things (IoT) devices under the LitePoint brand name. This segment offers IQxel products for Wi-Fi and other standards; IQxstream solution for testing GSM, EDGE, CDMA2000, TD-SCDMA, WCDMA, HSPA+, LTE-FDD, TD_LTE, and LTE-A technologies; modular wireless test instruments for design verification test and production testing of wireless components; lab-in-a-box zSeries solution for design verification of RF power amplifier and smart device RF front end modules; and test software for wireless chipsets.

The company was founded in 1960 and is headquartered in North Reading, Massachusetts.

Expertise: financial technology, analyzing market trends. Brian is a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to research stock fundamentals. Brian’s background is in physics & computer science and previously worked as a software engineer at GE Healthcare. He enjoys applying his expertise in technology to help find market trends that impact investors. Brian can be reached at brian@finbox.io or at +1 (516) 778-6257.

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