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Here's How Much You'd Have If You Invested $1000 in Teradyne a Decade Ago

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For most investors, how much a stock's price changes over time is important. This factor can impact your investment portfolio as well as help you compare investment results across sectors and industries.

The fear of missing out, or FOMO, also plays a factor in investing, especially with particular tech giants, as well as popular consumer-facing stocks.

What if you'd invested in Teradyne (TER - Free Report) ten years ago? It may not have been easy to hold on to TER for all that time, but if you did, how much would your investment be worth today?

Teradyne's Business In-Depth

With that in mind, let's take a look at Teradyne's main business drivers.

Headquartered in North Reading, MA, Teradyne Inc. is a leading provider of automated test equipment. The company is primarily focused on the semiconductor test market, which generates the bulk of its revenues. It also provides specialized system testing equipment for specific end markets.

The semiconductor test product line primarily consists of the FLEX platform (including the IG-XL software operating system enabling single or simultaneous testing of semiconductor devices), the J750 testing system based on the IG-XL software (for very high-volume testing, as required for microprocessors) the Magnum test platform (enabling testing of memory devices produced in very large quantities) and the ETS platform (focused on analog/mixed signal discrete devices that usually have a lower pin count for testing through the proprietary SmartPin technology). Additionally, the company also offers a broad range of services across the world that helps in the deployment and functioning of its testing systems.

Customers primarily consist of semiconductor manufacturers, including integrated device manufacturers (IDMs) or foundries, as well as outsourced assembly and test subcontractors (OSATs).

The company reports revenues mainly under four segments. These segments are semiconductor Test, Industrial Automation, System Test and Wireless Test business.

The company has leveraged its expertise in semiconductor testing systems to expand into system testing for military/aerospace instrumentation, hard disk drive (including in-circuit test and x-ray inspection), printed circuit boards and automotive system diagnosis.

Teradyne has a large number of competitors, given its comprensive product portfolio.

Bottom Line

Anyone can invest, but building a successful investment portfolio requires research, patience, and a little bit of risk. So, if you had invested in Teradyne ten years ago, you're likely feeling pretty good about your investment today.

According to our calculations, a $1000 investment made in May 2011 would be worth $8,467.69, or a gain of 746.77%, as of May 31, 2021, and this return excludes dividends but includes price increases.

In comparison, the S&P 500 gained 215.84% and the price of gold went up 19.21% over the same time frame.

Analysts are forecasting more upside for TER too.

Teradyne is gaining on robust Semiconductor Test and System Test businesses. Further, the company continues to benefit from expanding memory market exposure and strong product lineup. Additionally, robust Test demand and strong product lineup are major positives. Further, the company’s lean cost structure and strong balance sheet remain tailwinds. Furthermore, management is optimistic about the Universal Robots acquisition and continuous design wins. We believe that the company has significant growth opportunities in the high-growth wireless test market in the long haul. Also, rising memory and storage test shipments, and new product design wins are major positives. The stock has outperformed its industry over a year. However, weakness in the mobility test market is a serious concern. Also, sluggishness in HDD business is a major headwind.

The stock has jumped 5.81% over the past four weeks. Additionally, no earnings estimate has gone lower in the past two months, compared to 7 higher, for fiscal 2021; the consensus estimate has moved up as well.

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