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On Wednesday, Cantor Fitzgerald analyst C.J. Muse adjusted the price target for Teradyne stock (NASDAQ:TER), reducing it to $110 from the previous $150 while maintaining an Overweight rating. The revision followed Teradyne’s Analyst Day, where management presented their 2028 target model but also revised their financial estimates downwards for the years 2025 and 2026. The announcement led to a significant decline in Teradyne’s share value, with the stock currently trading at $87.07, down 21% in the past week. According to InvestingPro data, the stock is now trading near its 52-week low of $82.98, suggesting potential value for investors looking at the longer term.
During the event, Teradyne’s management provided insights into the company’s long-term financial goals, but the lowered forecasts for the mid-term surprised the market. Muse expressed confusion over the management’s approach to financial guidance, suggesting that they should focus on a single-quarter forward guide and the 2028 target model, rather than providing multi-year forecasts. InvestingPro analysis shows that despite recent challenges, Teradyne maintains strong fundamentals with a healthy current ratio of 2.91x and operates with moderate debt levels. For deeper insights into Teradyne’s financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
Despite the reduced estimates, Muse noted that Teradyne has not experienced any order cancellations. The adjustments appear to be a cautious response to delays and the current market uncertainty rather than a reflection of lost business. This prudence seems to be a strategic move by Teradyne’s management to navigate through unpredictable market conditions. The company maintains strong profitability with a gross margin of 58.48% and has demonstrated consistent dividend payments for 12 consecutive years.
The Overweight rating indicates that Cantor Fitzgerald still sees Teradyne’s stock as a potentially good investment over the long term, despite the near-term challenges reflected in the revised price target. The firm believes the company’s fundamentals may support growth in the future, aligning with the optimistic 2028 target model presented by Teradyne.
Investors and market watchers will likely continue to monitor Teradyne’s performance closely, especially in regards to how well the company can adhere to its 2028 targets amidst the revised shorter-term estimates and ongoing market volatility.
In other recent news, Teradyne has announced plans to acquire Quantifi Photonics, a company specializing in photonic integrated circuit testing, to enhance its capabilities in the high-performance computing market. This acquisition, expected to be finalized in the second quarter of 2025, aims to address the increasing demand for optical interconnect solutions essential for next-generation networks. Meanwhile, Evercore ISI has revised its price target for Teradyne from $150 to $115, maintaining an Outperform rating despite recent stock declines. This adjustment follows Teradyne’s Analyst Day, where the company revised its second-quarter and 2025 projections downward due to trade-related delays.
Teradyne has also provided updated financial guidance, anticipating flat or slightly decreased revenue for the second quarter of 2025 compared to the first quarter. For the full year of 2025, the company expects revenue growth of 5% to 10% relative to 2024, though it projects that 2026 revenue and earnings per share will trend toward the lower end of its previous earnings model. The company highlighted short-term volatility in its SemiTest business and uncertainties from tariffs and trade restrictions but noted these factors are not expected to impact first-quarter guidance. Investors and analysts will be closely monitoring Teradyne’s performance in the coming quarters amid these challenges.
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