We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
The Zacks Computer and Technology Sector has struggled mightily year-to-date, decreasing roughly 20% in value and extensively underperforming the S&P 500.
A hawkish Fed, paired with supply chain and geopolitical issues, has created a dark fiscal cloud above companies in the sector.
A company in the sector, Teradyne (TER - Free Report) , carries a Zacks Rank #5 (Strong Sell) with an overall VGM Score of an F – never a pairing that you want to see.
Teradyne is a leading provider of automated test equipment, primarily focused on the semiconductor test market, which generates the bulk of its revenues.
Let’s take a closer look at the company and why it’s landed itself into such an unfavorable rank.
Share Performance
Teradyne shares have struggled mightily in 2022, losing more than 40% in value and coming nowhere near the general market’s performance.
Image Source: Zacks Investment Research
Even over the last month, when the market has rallied, TER shares have still lagged, decreasing nearly 5% in value.
The poor share performance indicates that sellers have been in control of shares throughout the whole year.
Growth Estimates
Analysts have been overwhelmingly bearish across all timeframes over the last 60 days with 100% agreement.
Image Source: Zacks Investment Research
For the company’s current fiscal year (FY22), the Zacks Consensus EPS Estimate of $3.91 reflects a concerning 35% Y/Y drop in earnings.
Image Source: Zacks Investment Research
TER’s top-line projections indicate some softening as well – the company is forecasted to generate $3.1 billion in sales throughout FY22, penciling in a steep 16% drop-off from FY21 annual sales of $3.7 billion.
Image Source: Zacks Investment Research
Valuation
Pivoting to valuation, TER shares could be considered overvalued, further bolstered by its Style Score of an F for Value.
Teradyne’s forward earnings multiple resides at a steep 25.8X, undoubtedly on the higher side. In addition, the value represents a 3% premium relative to its Zack Sector.
Image Source: Zacks Investment Research
Bottom Line
Teradyne (TER - Free Report) shares have been the victim of a deep double-digit valuation slash year-to-date.
This adverse price action, paired with overwhelmingly negative estimate revisions, paints a grim picture for the company in the short term.
The company is a Zacks Rank #5 (Strong Sell) and a stock that investors will be better off staying away from for now.
Instead, investors should pivot to stocks that either carry a Zacks Rank #1 (Strong Buy) or Zacks Rank #2 (Buy) – the odds of reaping considerable gains are much higher within the companies that carry these ranks.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Bear of the Day: Teradyne (TER)
The Zacks Computer and Technology Sector has struggled mightily year-to-date, decreasing roughly 20% in value and extensively underperforming the S&P 500.
A hawkish Fed, paired with supply chain and geopolitical issues, has created a dark fiscal cloud above companies in the sector.
A company in the sector, Teradyne (TER - Free Report) , carries a Zacks Rank #5 (Strong Sell) with an overall VGM Score of an F – never a pairing that you want to see.
Teradyne is a leading provider of automated test equipment, primarily focused on the semiconductor test market, which generates the bulk of its revenues.
Let’s take a closer look at the company and why it’s landed itself into such an unfavorable rank.
Share Performance
Teradyne shares have struggled mightily in 2022, losing more than 40% in value and coming nowhere near the general market’s performance.
Image Source: Zacks Investment Research
Even over the last month, when the market has rallied, TER shares have still lagged, decreasing nearly 5% in value.
The poor share performance indicates that sellers have been in control of shares throughout the whole year.
Growth Estimates
Analysts have been overwhelmingly bearish across all timeframes over the last 60 days with 100% agreement.
Image Source: Zacks Investment Research
For the company’s current fiscal year (FY22), the Zacks Consensus EPS Estimate of $3.91 reflects a concerning 35% Y/Y drop in earnings.
TER’s top-line projections indicate some softening as well – the company is forecasted to generate $3.1 billion in sales throughout FY22, penciling in a steep 16% drop-off from FY21 annual sales of $3.7 billion.
Image Source: Zacks Investment Research
Valuation
Pivoting to valuation, TER shares could be considered overvalued, further bolstered by its Style Score of an F for Value.
Teradyne’s forward earnings multiple resides at a steep 25.8X, undoubtedly on the higher side. In addition, the value represents a 3% premium relative to its Zack Sector.
Image Source: Zacks Investment Research
Bottom Line
Teradyne (TER - Free Report) shares have been the victim of a deep double-digit valuation slash year-to-date.
This adverse price action, paired with overwhelmingly negative estimate revisions, paints a grim picture for the company in the short term.
The company is a Zacks Rank #5 (Strong Sell) and a stock that investors will be better off staying away from for now.
Instead, investors should pivot to stocks that either carry a Zacks Rank #1 (Strong Buy) or Zacks Rank #2 (Buy) – the odds of reaping considerable gains are much higher within the companies that carry these ranks.