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On Tuesday, JMP analysts maintained a Market Outperform rating for Teradata (NYSE:TDC) following the company’s recent product launch. Teradata introduced its Enterprise Vector Store on March 3, 2025, which integrates NVIDIA (NASDAQ:NVDA)’s NeMo Retriever microservices to enhance computing and optimize RAG. This launch comes after Teradata’s shares have dropped 25% year to date, a contrast to the 4% decrease experienced by the Russell 3000 over the same period. According to InvestingPro data, the stock appears undervalued, with analyst targets ranging from $25 to $37, suggesting potential upside from current levels around $23.
The Enterprise Vector Store is designed as a unified, reliable data repository, enhancing the existing Teradata platform. This innovation stems from Teradata’s strategic partnership with NVIDIA, announced in October 2024, leveraging NVIDIA’s NeMo Retriever technology. The NeMo Retriever is tailored to allow the extraction of insights from unstructured data sources, facilitating the development of RAG-based applications by developers. InvestingPro analysis shows Teradata maintains strong financial health with a 61% gross profit margin and robust cash flow generation, supporting its continued investment in innovation.
The new offering by Teradata aims to address the common trade-offs in agentic AI, which often involve balancing cost against the size and speed of data processing. The Enterprise Vector Store promises cost-efficient scaling and smooth integration, positioning it as a competitive product in the market.
Despite the advantages highlighted, the Enterprise Vector Store is currently available only in a private preview. Teradata anticipates a broader release, with the product expected to become generally available in July 2025. The anticipation of this wider release may contribute to the analyst’s positive outlook on Teradata’s stock performance.
In other recent news, Teradata Corporation reported fourth-quarter revenue of $409 million, which fell short of analyst expectations of $414.95 million, marking an 11% decline year-over-year. Despite this, the company’s adjusted earnings per share exceeded expectations, coming in at $0.53 compared to the anticipated $0.44. However, Teradata’s guidance for 2025 was less optimistic, with projected earnings per share of $2.15-$2.25, missing the analyst consensus of $2.46. In a related development, Teradata’s public cloud annual recurring revenue increased 15% year-over-year to $609 million, though total annual recurring revenue saw a 6% decline to $1.47 billion.
Amid these financial updates, Teradata announced a change in its leadership, promoting Michael Hutchinson to Chief Operating Officer. Guggenheim Securities adjusted its price target for Teradata to $37, down from $42, while maintaining a Buy rating, noting challenges in meeting financial targets. Guggenheim highlighted Teradata’s strategic value and recurring revenue stream despite its revised financial outlook. Additionally, the departure of CFO Claire Bramley was confirmed, as she plans to take a CFO position in another industry.
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