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Tuesday, Teradyne (NASDAQ:TER) shares were the subject of attention as Cantor Fitzgerald analyst C.J. Muse reiterated an Overweight rating and a $90.00 price target on the company. The semiconductor testing equipment maker, currently valued at $12.36 billion, maintains strong financial health according to InvestingPro metrics. Muse’s analysis followed Teradyne’s after-hours earnings report, which revealed a beat on expectations, primarily driven by strength in the Semiconductor Test segment, particularly in Mobile. Despite the volatile market conditions and a previous outlook cut in mid-March due to tariff-related delays, Teradyne has maintained its June quarter revenue guidance at $645 million.
The company’s guidance suggests a roughly 6% sequential decline for the second quarter, likely due to various factors including a slowdown in MRVL Trainium, a pause in HBM Hynix, the loss of TSLA ADAS business, and potentially slower Auto/Industrial builds. These elements contribute to the key question regarding growth prospects for the latter half of the year.
Muse had anticipated a significant reduction in forecasts, considering the strong second-half recovery implied by the company’s earlier guidance. Achieving such a recovery would necessitate a true cyclical rebound—a challenging prospect given the current economic environment. Analysts at Cantor Fitzgerald had predicted that the EPS for the calendar year 2025 could trend towards $2.50-2.75, rather than the consensus estimate of $3.31, with the maintained second-quarter guidance suggesting a possible lean towards the higher end of their range.
Teradyne’s stock performance has notably lagged behind the SOX since their fourth-quarter report at the end of January, showing a 37% decline compared to the SOX’s 14% drop. InvestingPro data shows the stock has fallen 32% over the past six months, though it has recently shown signs of recovery with a 7.77% gain in the past week. Muse suggests that with the second-quarter guidance confirmed and potential for an estimates reset, the stock might be approaching a bottom. This theory is seemingly supported by management’s decision to increase the share repurchase program, indicating a potential move to bolster shareholder value amidst market uncertainties. Trading at a P/E ratio of 22.46, InvestingPro analysis suggests the stock is currently undervalued, with analyst price targets ranging from $69 to $155. For deeper insights into Teradyne’s valuation and 10+ additional ProTips, consider accessing the comprehensive Pro Research Report available on InvestingPro.
In other recent news, Teradyne has seen a series of adjustments in its stock ratings and financial outlooks from various analysts. Cantor Fitzgerald revised its price target for Teradyne to $90, maintaining an Overweight rating, citing macroeconomic challenges and a potential reduction in revenue forecasts for 2025. KeyBanc Capital Markets downgraded Teradyne from Overweight to Sector Weight due to trade uncertainties, but remains optimistic about long-term growth prospects. Meanwhile, Morgan Stanley (NYSE:MS) lowered its price target to $69 and maintained an Underweight rating, reflecting concerns over a slower recovery in key markets.
Northland Securities also adjusted its price target to $105, keeping an Outperform rating, and noted that tariff uncertainties might impact short-term performance while expressing confidence in long-term growth. TD Cowen cut its price target to $110 but maintained a Buy rating after Teradyne’s analyst day, highlighting challenges in the semiconductor testing segment. These recent developments indicate varying levels of concern and optimism among analysts regarding Teradyne’s financial performance and market conditions. The company is expected to navigate near-term challenges while positioning itself for potential recovery and growth in the longer term.
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