We expect Teradyne Inc. (TER - Free Report) to beat expectations when it reports first-quarter 2017 results on Jan 26.
Notably, Teradyne's results surpassed the Zacks Consensus Estimate in the preceding four quarters. It has an average four-quarter positive surprise of 24.8%.
Also, in the last one year, shares of Teradyne outperformed the Zacks categorized Electronic Testing Equipment industry. While the industry rallied 38.5%, the stock gained 57.5%.
Why a Likely Positive Surprise?
Our proven model shows that Teradyne is likely to beat on earnings because it has the right combination of the two key ingredients.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, stands at +2.63%. This is a meaningful indicator of a likely positive earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Teradynecarries a Zacks Rank #2 (Buy).
Note that stocks with a Zacks Rank #1 (Strong Buy), 2 or 3 (Hold) have a significantly higher chance of beating earnings estimates. The Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement.
The combination of Teradyne’s favorable Zacks Rank and positive Earnings ESP makes us reasonably confident about an earnings beat.
What is Driving Better-Than-Expected Earnings?
Teradyne supplies automation equipment for test and industrial applications. The company focuses on the semiconductor test market, which generates the bulk of its revenues.
A recovery in the semiconductor business (processors, MCUs and power management), strong demand in its core test businesses and high-growth in the wireless test market are expected to drive better-than-expected first-quarter results.
Moreover, growing memory market exposure and strong product lineup will drive results. While the opportunity is relatively smaller than SoC test, increased complexities related to interface speeds in both NAND and DRAM devices are driving demand for testing devices. The company has been making steady gains in this market. Management intends the market share to increase this year on the back of strong demand in memory test, particularly with respect to new ramps.
Additionally, the popularity of its products, the Universal Robots acquisition and continuous design win momentum are expected to drive its results in the to-be reported quarter.
Stocks to Consider
You could consider the following stocks with a positive Earnings ESP and a favorable Zacks Rank:
MGIC Investment Corporation (MTG - Free Report) , with an Earnings ESP of +8.33% and Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Fortive Corporation (FTV - Free Report) with an Earnings ESP of +1.75% and a Zacks Rank #2.
Northrop Grumman Corporation (NOC - Free Report) , with an Earnings ESP of +0.35% and a Zacks Rank #2.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
We expect Teradyne Inc. (TER - Free Report) to beat expectations when it reports first-quarter 2017 results on Jan 26.
Notably, Teradyne's results surpassed the Zacks Consensus Estimate in the preceding four quarters. It has an average four-quarter positive surprise of 24.8%.
Also, in the last one year, shares of Teradyne outperformed the Zacks categorized Electronic Testing Equipment industry. While the industry rallied 38.5%, the stock gained 57.5%.
Why a Likely Positive Surprise?
Our proven model shows that Teradyne is likely to beat on earnings because it has the right combination of the two key ingredients.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, stands at +2.63%. This is a meaningful indicator of a likely positive earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Teradynecarries a Zacks Rank #2 (Buy).
Note that stocks with a Zacks Rank #1 (Strong Buy), 2 or 3 (Hold) have a significantly higher chance of beating earnings estimates. The Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement.
The combination of Teradyne’s favorable Zacks Rank and positive Earnings ESP makes us reasonably confident about an earnings beat.
What is Driving Better-Than-Expected Earnings?
Teradyne supplies automation equipment for test and industrial applications. The company focuses on the semiconductor test market, which generates the bulk of its revenues.
A recovery in the semiconductor business (processors, MCUs and power management), strong demand in its core test businesses and high-growth in the wireless test market are expected to drive better-than-expected first-quarter results.
Moreover, growing memory market exposure and strong product lineup will drive results. While the opportunity is relatively smaller than SoC test, increased complexities related to interface speeds in both NAND and DRAM devices are driving demand for testing devices. The company has been making steady gains in this market. Management intends the market share to increase this year on the back of strong demand in memory test, particularly with respect to new ramps.
Additionally, the popularity of its products, the Universal Robots acquisition and continuous design win momentum are expected to drive its results in the to-be reported quarter.
Stocks to Consider
You could consider the following stocks with a positive Earnings ESP and a favorable Zacks Rank:
MGIC Investment Corporation (MTG - Free Report) , with an Earnings ESP of +8.33% and Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Fortive Corporation (FTV - Free Report) with an Earnings ESP of +1.75% and a Zacks Rank #2.
Northrop Grumman Corporation (NOC - Free Report) , with an Earnings ESP of +0.35% and a Zacks Rank #2.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
Get the latest research report on NOC - FREE
Get the latest research report on MTG - FREE
Get the latest research report on TER - FREE
Get the latest research report on FTV - FREE