Teradyne stock price target raised to $630 from $585 at UBS

Investing.com - UBS raised its price target on Teradyne (NASDAQ:TER) to $630 from $585 on Thursday, while maintaining a Buy rating on the stock. The semiconductor testing equipment manufacturer, currently trading at $93.03 with a market capitalization of $14.9 billion, appears fairly valued according to InvestingPro Fair Value estimates.

The research firm cited Teradyne’s continued healthy business trends despite some initial investor concerns about potential demand pull-forward in the second quarter. UBS noted the company has maintained a book-to-bill ratio above 1.0 for seven consecutive quarters, indicating sustained demand. This strength is reflected in Teradyne’s impressive 9.3% revenue growth and GOOD Financial Health Score from InvestingPro, which highlights strong cash flows and moderate debt levels.

UBS observed that while Teradyne management mentioned a possible $15-20 million uplift in the second quarter, the company continues to see healthy trends entering the third quarter. Management’s cautious guidance appears to stem primarily from tariff-related macroeconomic uncertainty rather than fundamental business weakness.

The firm highlighted several positive indicators, including stable trends in Teradyne’s longer-cycle Aerospace and Defense businesses and strong digital imaging performance with a book-to-bill ratio of 1.1, matching the previous quarter. UBS also noted signs of improvement in shorter-cycle areas such as Machine Vision. InvestingPro analysis reveals 8+ additional key insights about Teradyne’s performance and future prospects, available exclusively to subscribers through the comprehensive Pro Research Report.

The price target increase reflects UBS rolling forward its valuation period from 2026 to the third quarter of 2026 through the second quarter of 2027, while keeping its model estimates largely unchanged.

In other recent news, Teradyne reported its first-quarter results, revealing a 9% decline in sales compared to the previous quarter. Despite this, the company’s non-GAAP earnings per share (EPS) of $0.75 exceeded analyst expectations from Stifel, who had estimated $0.65, due to stronger-than-anticipated gross margins. Teradyne’s semiconductor testing segment remains a significant revenue contributor, making up 79% of total sales. Meanwhile, the company’s robotics revenue experienced a notable decline, falling 30% quarter-over-quarter and 22% year-over-year.

In analyst updates, JPMorgan downgraded Teradyne from Overweight to Neutral, citing concerns about potential pauses in capital spending from customers and a slow recovery in the semiconductor testing equipment market. Goldman Sachs initiated coverage on Teradyne with a Sell rating, pointing to the company’s limited exposure to Merchant GPU Test as a potential drawback. Additionally, Teradyne announced the appointment of two new independent directors, Drew Henry and Dr. Necip Sayiner, as part of a multi-year board refreshment process. Lastly, shareholders approved amendments to the company’s Equity and Cash Compensation Incentive Plan during the Annual Meeting, implementing several best practices in compensation governance.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.