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

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Teradyne (TER - Free Report) closed the most recent trading day at $77.20, moving +0.49% from the previous trading session. The stock lagged the S&P 500's daily gain of 0.52%. Elsewhere, the Dow gained 0.01%, while the tech-heavy Nasdaq added 1.21%.

Coming into today, shares of the maker of wireless products, data storage and equipment to test semiconductors had lost 16.48% in the past month. In that same time, the Computer and Technology sector gained 0.89%, while the S&P 500 gained 0.49%.

Investors will be hoping for strength from TER as it approaches its next earnings release. The company is expected to report EPS of $1.11, up 44.16% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $785.96 million, up 35.03% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $3.87 per share and revenue of $2.85 billion. These totals would mark changes of +35.31% and +23.98%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for TER. 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.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. TER is currently a Zacks Rank #2 (Buy).

Valuation is also important, so investors should note that TER has a Forward P/E ratio of 19.84 right now. For comparison, its industry has an average Forward P/E of 30.84, which means TER is trading at a discount to the group.

We can also see that TER currently has a PEG ratio of 1.19. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Electronics - Testing Equipment industry currently had an average PEG ratio of 3.08 as of yesterday's close.

The Electronics - Testing Equipment industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 199, which puts it in the bottom 22% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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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