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Teradyne (TER) Exceeds Market Returns: Some Facts to Consider

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The latest trading session saw Teradyne (TER - Free Report) ending at $125.37, denoting a +0.94% adjustment from its last day's close. The stock's change was more than the S&P 500's daily gain of 0.45%. Meanwhile, the Dow experienced a drop of 0.23%, and the technology-dominated Nasdaq saw an increase of 0.84%.

The maker of wireless products, data storage and equipment to test semiconductors's shares have seen an increase of 1.54% over the last month, surpassing the Computer and Technology sector's loss of 0.98% and falling behind the S&P 500's gain of 2.54%.

The investment community will be paying close attention to the earnings performance of Teradyne in its upcoming release. The company's earnings per share (EPS) are projected to be $0.78, reflecting a 2.5% decrease from the same quarter last year. Simultaneously, our latest consensus estimate expects the revenue to be $714.07 million, showing a 1.47% escalation compared to the year-ago quarter.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $3.02 per share and revenue of $2.78 billion, indicating changes of +3.07% and +4.03%, respectively, compared to the previous year.

Furthermore, it would be beneficial for investors to monitor any recent shifts in analyst projections for Teradyne. These revisions typically reflect the latest short-term business trends, which can change frequently. Hence, positive alterations in estimates signify analyst optimism regarding the company's business and profitability.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional 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 has moved 0.21% higher. Right now, Teradyne possesses a Zacks Rank of #3 (Hold).

In terms of valuation, Teradyne is currently trading at a Forward P/E ratio of 41.08. For comparison, its industry has an average Forward P/E of 25.32, which means Teradyne is trading at a premium to the group.

It's also important to note that TER currently trades at a PEG ratio of 2.54. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. As the market closed yesterday, the Electronics - Testing Equipment industry was having an average PEG ratio of 2.54.

The Electronics - Testing Equipment industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 62, placing it within the top 25% of over 250 industries.

The Zacks Industry Rank gauges the strength of our 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.

Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.


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