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On Monday, Cantor Fitzgerald analysts maintained an Overweight rating on Teradyne stock (NASDAQ:TER) with a steady price target of $160.00. The $20.2 billion semiconductor testing equipment maker, currently trading at $123.93, has seen its stock rise nearly 24% over the past year. InvestingPro analysis indicates the stock is trading above its Fair Value, with multiple ProTips highlighting its high valuation multiples. The firm anticipates a dynamic earnings call for the company, with several forecasts expected to be presented by management. These include a guide for the first quarter, a potential soft guide for the second quarter, which might align with consensus expectations, and the introduction of forecasts for calendar year 2025. Additionally, updates to the calendar year 2026 target model and the initiation of a new calendar year 2028 target model are on the agenda ahead of Teradyne's Analyst Day set for March 11th.
Analysts predict a slight beat and raise in the upcoming announcement, with calendar year 2025 revenue and earnings per share (EPS) estimates tracking close to $3.3 billion and $4.25, respectively. These figures are slightly below the consensus estimates of $3.4 billion in revenue and $4.22 in EPS. The firm also suggests that the high end of the calendar year 2026 target model may no longer be achievable, with guidance likely to be adjusted to around a $6.00 midpoint instead of the previous $6.50 target. However, this adjustment is not expected to come as a surprise to the market.
Looking further ahead, Teradyne's path to earnings power in calendar year 2028 is projected to show EPS growth at a compound annual growth rate (CAGR) of approximately 28% from the calendar year 2024 base. The company's strong financial foundation supports these growth ambitions, with InvestingPro data showing robust financial health metrics, including a current ratio of 3.09x and minimal debt-to-equity of 0.03. Discover more insights about Teradyne's growth potential and 13 additional ProTips with an InvestingPro subscription, including access to the comprehensive Pro Research Report. This would indicate an EPS range of $7.00 to $10.00 for calendar year 2028, reflecting the company's growth potential over the next several years.
These projections and updates are part of a broader strategy discussion that Teradyne is set to have during its Analyst Day. The event is likely to provide investors with a clearer picture of the company's long-term financial targets and operational goals. The company's stock performance and investor expectations may be influenced by these disclosures and the management's ability to meet these ambitious targets, particularly given its current P/E ratio of 42x and strong gross profit margin of 58%.
In other recent news, Teradyne has seen a flurry of activity from various analysts. Morgan Stanley (NYSE:MS) downgraded Teradyne's stock to Underweight, citing its diminishing market share and competition from Advantest. The firm also noted that despite challenges, Teradyne maintains strong fundamentals. On the contrary, Northland Securities and JPMorgan both upgraded Teradyne's stock outlook, expressing confidence in the company's growth potential. However, Craig-Hallum reduced its price target for Teradyne due to mixed performance across its business segments, while Evercore ISI lowered its price target but maintained an Outperform rating.
In other changes, Ford (NYSE:F) Tamer, a member of Teradyne's Board of Directors, announced his decision to 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. Meanwhile, Teradyne's third-quarter results surpassed its sales guidance with revenues of $737 million and non-GAAP earnings per share at $0.90. The company's revenue growth is anticipated to accelerate, with revenues predicted to reach approximately $4.4 billion in 2026.
These developments indicate a dynamic period for Teradyne as it navigates market challenges and capitalizes on growth opportunities. Investors should keep a close eye on these recent developments as they could have significant implications for Teradyne's future performance.
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