Teradyne Inc (TER) Reported a 19.18% Operating Margin Last Year—What’s the Real Story?

Cantor Fitzgerald has recently raised Teradyne Inc (TER) stock to Overweight rating, as announced on August 16, 2024, according to Finviz. Earlier, on July 26, 2024, Craig Hallum had reduced the stock from a Buy to Hold, setting a price target of $124. Northland Capital also reduced Market Perform rating. Additionally, Goldman raised Buy rating on May 20, 2024, with a target price of $161. Evercore ISI analysts, in their report published on April 16, 2024, also initiated Outperform rating and set a price target of $130 for Teradyne Inc’s stock. Analyst ratings are significant because they provide insights into stock performance expectations, influencing investor decisions and market sentiment.

Teradyne Inc (TER) Stock Trading Recap

On Monday, Teradyne Inc (TER) stock saw a decline, ending the day at $104.27 which represents a decrease of $-2.22 or -2.08% from the prior close of $106.49. The stock opened at $104.93 and touched a low of $104.07 during the day, reaching a high of $106.13. The volume of shares traded was 1.83 million falling short of the average volume of 1.94 million.


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TER Stock Performance and Moving Averages

In recent trading, Teradyne Inc (TER) stock price has shown some volatility, fluctuating -6.34% over the last five trades and -20.10% over the past 30 trades. This represents a notable shift from earlier in the year. Over the last six months, the stock has risen by -14.50%, and it has plunged by -11.87% in the previous three months. Currently, TER is trading at -13.51%, -17.46%, and -15.52% relative to its 20-Day, 50-Day, and 200-Day Simple Moving Averages, respectively.

As of the latest trading close, TER, a Technology sector stock, is trading -36.11% below its 52-week high but remains 24.52% above its 52-week low. The Average True Range (ATR) (14 days) of 3.95 highlights the stock’s average volatility, providing insight into how much the price typically fluctuates. This measure is crucial for understanding potential price swings and assessing overall market risk.

Teradyne Inc’s Profitability and Valuation Ratios

Teradyne Inc’s profitability metrics reveal strong financial health. The company currently boasts an operating margin of 19.18% and a profit margin of 18.77%, with a gross margin of -14.50%. The profit margin, also known as the revenue ratio or gross profit ratio, measures how efficiently a company converts sales into net income; higher margins indicate greater profitability.

In terms of valuation, Teradyne Inc’s market capitalization stands at $17.06 billion. Market cap represents the total value of all outstanding shares and is a key indicator of a company’s market value. The stock’s price-to-earnings (P/E) ratio is 33.17, assessing the company’s valuation relative to its earnings. The forward P/E ratio, which uses projected earnings for the next financial year, is 24.65. Additionally, the Price-to-Sales Ratio is 6.24, reflecting the market’s valuation of the company’s sales, while the Price-to-Book Ratio is 5.85, comparing the market value to the company’s book value.

Understanding Insider Trading

Investors often prefer to invest in shares held by company insiders, as management is typically more aligned with the company’s success and shareholder interests. Currently, insiders own just 1.73% of Teradyne Inc (TER)’s shares, while financial institutions hold 98.81%.

Notable insider trades include Burns Richard John, President, Semiconductor Test at Teradyne Inc (TER), who sold 789 shares on Oct 01 ’24, at $132.8 each, totaling $0.10 million. On Oct 01 ’24, Smith Gregory Stephen, President and CEO, sold 3080 shares for $132.8 each, amounting to $0.41 million. Additionally, on Sep 11 ’24, Smith Gregory Stephen sold 3080 shares at $130 each, generating $0.40 million.

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