Teradyne, Inc. (TER)
NEUTRALFundamental
67
Price
$366.86
Market Cap
$57.05B
Part 1 · What the company is worth
Overview
Teradyne makes the automated test equipment chipmakers use to check that every processor and memory chip works before it ships — machines that plug into a finished chip and run it through thousands of checks in seconds. It also makes smaller testers for circuit boards and defense electronics, and, through a separate Robotics division, collaborative robot arms and autonomous mobile robots used on factory floors. It sells machines and the software that runs them, not the chips themselves.
How it makes money
Teradyne sells testing systems as capital equipment: a chipmaker buys a tester as a one-time purchase (plus ongoing service and software fees), sized to how many chips it plans to run through its factories. Because a chipmaker only needs to buy enough testers to cover its production capacity, Teradyne's orders rise sharply when the industry is building new fabs or launching high-volume chips like AI processors, and fall just as sharply once that capacity is in place and utilized.
Revenue by segment
Testers for logic, memory and analog chips sold to chipmakers and their contract manufacturers — the core business, driven lately by AI chip demand.
Smaller testers for circuit boards, defense and aerospace electronics and other non-semiconductor products.
Collaborative robot arms and autonomous mobile robots sold to factories, a smaller and currently declining division.
Competitive moat
Switching costs · NarrowA chipmaker qualifies a specific tester model into its production line only after months of validation, and reprogramming test routines for a new vendor's machine is expensive and slow — so once Teradyne wins a fab, it tends to keep supplying it. The moat is narrow rather than wide because Advantest is a comparably strong rival, particularly in memory testing, and a major customer can and does qualify both.
What drives demand
CyclicalOrders depend on how much new chip production capacity the industry is building, which moves in sharp cycles: a shortage triggers a wave of new fab investment and tester orders, and the resulting overcapacity then causes orders to collapse until demand catches up again. AI chip demand has driven the current upswing in Semiconductor Test, but the segment has swung from boom to bust before.
Key risks
- Revenue concentrated in a few large chipmakers — A limited number of large semiconductor customers drive a substantial share of Semiconductor Test purchases, both directly and through their supply partners, so any one customer's slowdown has an outsized effect.
- Boom-bust capital-spending cycle — Tester orders follow the industry's fab-building cycle, which has swung from shortage to overcapacity within a few quarters before, making Teradyne's near-term order book difficult to predict.
- Robotics division has struggled to scale — Robotics revenue declined in 2025 on weaker sales of collaborative arms and mobile robots, and the division has yet to prove it can grow reliably alongside the core testing business.
- Concentrated competition from Advantest — Advantest is a comparably scaled rival, especially in memory testing, and a customer that qualifies both suppliers can shift volume between them based on price or delivery, limiting Teradyne's pricing power.
Customer concentration
Teradyne states that a limited number of large customers account for a substantial share of Semiconductor Test purchases, without disclosing an exact percentage; losing one of these customers, or a shift in their capital spending, would be far from a marginal event.
The case for
Buyers argue that AI chips need more, and more complex, testing than previous generations, that Teradyne's installed base and qualification lock-in keep it the default supplier once a fab is running, and that a Robotics turnaround would add a second growth leg to a business currently driven almost entirely by semiconductor test.
The case against
Sellers fear that the current AI-driven order wave repeats the industry's past boom-bust pattern, that a handful of large customers hold outsized influence over results, and that Advantest can match Teradyne on price and technology in the segments that matter most, particularly memory testing.
Written by the editors, published on August 18, 2026
Direct competitors
Who this company fights with for the same customers
No editorial profile for this company yet
No competitor list for this company yet.
Balance Sheet & Liquidity
Revenue
$4.46B
Trailing 12 months (through 6/28/2026)
Net Income
$1.15B
Trailing 12 months (through 6/28/2026)
Free Cash Flow
$450M
Total Equity
$2.80B
Total Liabilities
$1.39B
Current Ratio
2.12
Interest Coverage
118.77
Debt/EBITDA
0.13
Earnings Per Share
Revenue & Net Income
Free Cash Flow
Income Breakdown
Historical statement
Margins over time
Debt over time
How heavy the debt is
Growth grid
Growth — Revenue
Fair Value Estimation
Fair Value
$235.87
Current Price
$366.86
Margin of Safety
-55.5%
Fair Value Range
$153.31 - $318.42
Estimation Methods
Valuation Metrics
P/E Ratio
50.12
ROE
19.8%
P/B Ratio
16.60
P/FCF
71.32
Gross Margin
59.2%
ROIC
28.0%
Profitability Radar
Value Creation (Economic Moat)
ROIC
28.0%
WACC
14.3%
ROIC − WACC
+13.7 pp
ROIC exceeds the cost of capital — the company is creating value for shareholders.
Fundamental Analysis Criteria
Passed (18)
- EPS shows upward trend
- Price CAGR 30.92%
- ROIC 28.0%
- Gross Margin 59.2%
- Debt/Equity ratio
- Operating Margin 30.2%
- Positive Free Cash Flow
- Current Ratio
- Interest Coverage
- Debt/EBITDA
- Return on Tangible Assets
- ROE 38.0%
- Analyst Consensus 77% Buy
- Earnings Surprise avg 18.8%
- Earnings Quality (OCF/NI) 0.93
- Share Dilution -2.3%
- Net Margin Trend 25.8% vs 16.6%
- Piotroski F-Score 5/9
Failed (7)
- P/FCF 71.32
- P/B Ratio 16.60
- CapEx intensity
- Low reliance on intangibles
- Price below Graham Number
- DCF valuation (Overvalued)
- Revenue Growth 5Y 0.4%
Unavailable (2)
- Dividend Payout NaN%
- PEG Ratio (need PE > 0 and growth > 0)
Piotroski F-Score
Mixed signals: some areas need attention
Earnings Quality
Moderate: some gap between profits and cash
Share Dilution
Buying back shares. Shareholder friendly
Governance
Executive Team
| Name | Title | Age |
|---|---|---|
| Mr. Gregory Stephen Smith | President, CEO & Director | 61 |
| Ms. Michelle L. Turner | VP, CFO, Treasurer & Principal Accounting Officer | 51 |
| Mr. Ryan E. Driscoll | Vice President, General Counsel & Secretary | 47 |
| Mr. Sanjay Mehta | Executive Advisor | 56 |
| Mr. Shannon John Poulin | President of Semiconductor Test Division | 54 |
| Mr. Regan Mills | President of Product Test Group | 55 |
| Ms. Shannon Gath | VP & Chief Information Officer | - |
| Mr. Jim Mahon | VP & Chief Human Resources Officer | - |
| Mr. Jean-Pierre Hathout | President of the Teradyne Robotics | 55 |
| Mr. James Davidson | Chief Artificial Intelligence Officer | - |
Audit Risk
4
Board Risk
2
Compensation Risk
4
Shareholder Rights Risk
1
Part 2 · The price and when to enter
This part won't tell you whether the company is worth owning: it helps you choose when to buy it, once the fundamentals have convinced you. Inside: technical analysis, potential, historical drawdowns, gamma exposure.
Latest News
Recent headlines for TER, sourced from Markets Gazette.
- 6/17/2026POSITIVEIf You Invested $1000 In Teradyne Stock 10 Years Ago, You Would Have This Much Today
An investment of $1000 in Teradyne Inc. stock a decade ago would have yielded a significant return, illustrating the company's long-term growth trajectory. While specific figures are not provided in the title, the framing suggests substantial capital appreciation. Teradyne, a key player in the semiconductor testing equipment market, has likely benefited from industry expansion and technological advancements. Investors considering this stock should evaluate its historical performance in conjunction with current market conditions and future industry outlook.
- 4/24/2026NEUTRALHere's How Much $100 Invested In Teradyne 5 Years Ago Would Be Worth Today
An investment of $100 in Teradyne Inc. five years ago would have grown to approximately $220 today, representing a compound annual growth rate of about 17%. This performance reflects the company's trajectory in the semiconductor test equipment market. While past performance is not indicative of future results, this historical return provides context for the stock's valuation and investor sentiment over the medium term. Investors should consider current market conditions and Teradyne's future growth prospects.
- 4/10/2026NEUTRALHere's How Much You Would Have Made Owning Teradyne Stock In The Last 5 Years
An analysis of Teradyne Inc. stock performance over the past five years reveals a complex investment journey. While specific return figures are not detailed in the provided snippet, such historical performance reviews typically highlight periods of significant growth and potential drawdowns. Investors often use this data to gauge a company's resilience, growth trajectory, and management's effectiveness in navigating market cycles. The article likely aims to provide context for current investment decisions by illustrating past trends in revenue, profitability, and stock price movements, offering insights into the company's long-term value creation potential.
- 3/9/2026POSITIVEIf You Invested $100 In Teradyne Stock 5 Years Ago, You Would Have This Much Today
An investment of $100 in Teradyne Inc. (TER) five years ago would have yielded a significant return, illustrating the company's strong performance and growth trajectory. While specific figures are not provided in the summary, the premise suggests substantial capital appreciation for shareholders. This performance likely stems from advancements in Teradyne's semiconductor test equipment and automation solutions, catering to growing demand in sectors like AI and high-performance computing. Investors considering Teradyne should evaluate its competitive positioning and future innovation pipeline.
via Markets Gazette