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Teradata Q3 Earnings: Can NYSE:TDC Hit Its $0.30 EPS Target?


Teradata Corporation (NYSE:TDC) is scheduled to report Q3 earnings results after markets close for trading on November 5, 2020.

The company is expected to report earnings of $0.30/share on revenue of $447.3 million. The consensus earnings per share (EPS) of $0.30/share is based on a poll of 14 analysts and represents a decline in eps of −6.2% over the same quarter last year, when the company reported earnings of $0.32/share.

The revenue forecast of $447.3 million based on a poll of 11 analysts implies a year-over-year (YoY) decline in revenue of −2.6%. Last year the company reported $459 million in revenue for the quarter.

Expected to report EPS contraction of −6.2% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $447.27 $459.00 −2.6%
EPS $0.30 $0.32 −6.2%

Earnings Call Trends

Historically, management has exceeded analyst expectations 6 out of the last 8 tracked quarters, missed 1 quarter, and met expectations 1 quarter.

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

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.21 $0.24 14.1% Beat
Q1, 2020 $0.23 $0.27 18.4% Beat
Q4, 2019 $0.16 $0.22 38.5% Beat
Q3, 2019 $0.40 $0.32 −20.5% Missed
Q2, 2019 $0.29 $0.29 0% Met
Q1, 2019 $0.20 $0.22 12.5% Beat
Q4, 2018 $0.44 $0.49 12.2% Beat
Q3, 2018 $0.31 $0.36 15.5% 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 June 30, 2020, the stock price reacted by increasing 19.5%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 6, 2020 $20.57 $24.58 19.5% Increase
May 7, 2020 $22.94 $23.58 2.8% Increase
February 6, 2020 $24.67 $23.41 −5.1% Decline
November 7, 2019 $30.25 $25.41 −16.0% Decline

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.69, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.69 implies a 0.4% chance of earnings manipulation.

Fundamentals And Technical Analysis

Teradata Corporation is currently trading at $18.60/share, down −3.0% for the day. The company is trading at approximately 59.4% of its 52-week high of $31.42/share. The company’s stock price is down −24.3% since the last earnings report and down −9.8% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 27.31 suggests the company is trading in technically oversold territory. The RSI is considered overbought when above 70 and oversold when below 30.

NYSE:TDC Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 17.48 and a forward P/E multiple of 16.71.

Teradata Corporation’s current share price also implies a price-to-book (P/B) multiple of 5.86. The following table summarizes some other key fundamental ratios:

Data as of October 28, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $18.60
P/E Ratio 17.5x
P/E Ratio (Fwd) 16.7x
PEG Ratio 0.0
Total Debt / Total Capital 24.9%
Levered Free Cash Flow $134 million
EV / EBITDA 16.1x


Teradata Corporation is a mid-cap stock with a market capitalization of $2.091 billion and a total enterprise value of $2.291 billion. The company operates in the Information Technology sector and the Software industry.

Teradata Corporation provides hybrid cloud analytics software. Its solutions and services comprise software, hardware, and related business consulting and support services to deliver analytics in company’s analytical ecosystem. The company operates through three segments: North America and Latin America region; Europe, Middle East and Africa region; and Asia Pacific and Japan region. It offers Teradata Vantage, a data warehouse and analytics platform. The company’s business consulting services include various offerings, such as consulting to help organizations establish an analytic vision, and identify and operationalize analytical opportunities, as well as enable an analytical ecosystem architecture. It serves various industries comprising communications, financial services, government, healthcare, insurance, manufacturing, media and entertainment, oil and gas, retail, travel and transportation, and utilities. The company primarily sells and markets its solutions and services through a direct sales force. Teradata Corporation has a strategic partnership with Deutsche Telekom to support the digital transformation goals of small and medium sized businesses in Germany; and partnership with dotData to create a data science solution The company was founded in 1979 and is headquartered in San Diego, California.

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