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Teradyne (TER) Gains But Lags Market: What You Should Know

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In the latest trading session, Teradyne (TER - Free Report) closed at $76.87, marking a +1.77% move from the previous day. The stock lagged the S&P 500's daily gain of 2.02%. Elsewhere, the Dow gained 1.6%, while the tech-heavy Nasdaq added 2.71%.

Coming into today, shares of the maker of wireless products, data storage and equipment to test semiconductors had lost 12.45% in the past month. In that same time, the Computer and Technology sector lost 0.91%, while the S&P 500 lost 0.39%.

Investors will be hoping for strength from TER as it approaches its next earnings release. On that day, TER is projected to report earnings of $1.11 per share, which would represent year-over-year growth of 44.16%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $785.96 million, up 35.03% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $3.87 per share and revenue of $2.85 billion, which would represent changes of +35.31% and +23.98%, respectively, from the prior year.

Any recent changes to analyst estimates for TER should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. TER is holding a Zacks Rank of #2 (Buy) right now.

Looking at its valuation, TER is holding a Forward P/E ratio of 19.51. This represents a discount compared to its industry's average Forward P/E of 29.52.

Also, we should mention that TER has a PEG ratio of 1.17. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Electronics - Testing Equipment stocks are, on average, holding a PEG ratio of 2.95 based on yesterday's closing prices.

The Electronics - Testing Equipment industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 191, which puts it in the bottom 25% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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