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On Friday, Cantor Fitzgerald adjusted its price target for Teradyne stock (NASDAQ:TER), bringing it down to $150 from the previous $160, while still maintaining an Overweight rating on the company’s shares. Currently trading at $115.08, the company commands a market capitalization of $18.74 billion and trades at a P/E ratio of 36.76. According to InvestingPro analysis, the stock appears slightly overvalued based on its proprietary Fair Value model. The firm’s analysts noted that Teradyne continues to demonstrate strong leverage in key areas such as VIP, Networking, and HBM through partnerships with major industry players like Amazon (NASDAQ:AMZN), Broadcom (NASDAQ:AVGO), Marvell (NASDAQ:MRVL), NVIDIA (NASDAQ:NVDA), Hynix, and Samsung (KS:005930).
Despite Teradyne’s robust positioning, the analysts expressed concern over the company’s greater reliance on Mobility and Analog sectors compared to GPU/CPU markets. This shift in focus has led to Teradyne’s System on Chip (SoC) market share projection to reach a 20-year low of 32% in the calendar year 2024.
The analysis provided a silver lining, highlighting management’s expectations for a broad-based recovery in the non-AI business segment in the second half of 2025. This anticipated rebound is projected to sustain into the following years, potentially increasing market share to 36% by 2026 and 40% by 2027. InvestingPro data reveals that Teradyne maintains strong financial health with a current ratio of 2.91 and moderate debt levels. The company has demonstrated consistent growth with revenue increasing by 5.36% over the last twelve months.
Further details from the analysts included projections for Teradyne’s other business areas. They expect a strong recovery in Western Digital (NASDAQ:WDC)’s HDD and the upcoming Wifi 7-driven Litepoint by 2026. However, they predict a more modest growth for the Robotics division, estimating a 10% to 15% increase in the calendar years 2025 and 2026, respectively.
Lastly, Cantor Fitzgerald revised its earnings per share (EPS) estimate for Teradyne in the calendar year 2026 to $5.75, which contrasts with the company’s previous target range of $5.50 to $7.50 and is below the consensus estimate of $5.95. InvestingPro subscribers can access 13 additional key insights about Teradyne, including detailed analysis of its earnings potential and valuation metrics. The platform’s comprehensive Pro Research Report provides in-depth analysis of Teradyne’s financial health, which currently scores as "GOOD" in their proprietary rating system. Despite the lowered price target and EPS forecast, the analysts remain optimistic about Teradyne’s prospects, envisioning a strong sequential growth of at least 40% in the calendar year 2026, which underpins their decision to maintain an Overweight rating on the stock.
In other recent news, Teradyne reported strong fourth-quarter earnings, surpassing both Stifel’s and consensus estimates with revenues of $737 million and non-GAAP earnings per share at $0.90. This was followed by a series of analyst upgrades and downgrades. UBS cut Teradyne’s stock target to $155 but maintained its Buy rating, while Morgan Stanley (NYSE:MS) downgraded Teradyne’s stock to Underweight, reducing its target to $112. Stifel and Cantor Fitzgerald maintained their respective Hold and Overweight ratings, with price targets of $125 and $160.
Teradyne is planning significant cost reductions in its industrial automation business, which could improve its financial outlook. However, the company has offered soft guidance for June, suggesting lower seasonality. Despite this, Teradyne’s long-term projections, including its 2026 forecast and its 2028 model targeting approximately $8.25 earnings per share, suggest potential growth.
Ford (NYSE:F) Tamer, a member of Teradyne’s Board of Directors, will not stand for re-election at the upcoming annual shareholders meeting in 2025 due to his recent appointment as CEO of Lattice (OTC:LTTC) Semiconductor Corporation. These recent developments suggest a dynamic period for Teradyne as it navigates market challenges and capitalizes on growth opportunities.
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