Teradyne (NASDAQ:TER) Shares Down 7.4% on Analyst Downgrade

Key Points

• Teradyne shares fell 7.4% after UBS cut its price target from $485 to $430, though it maintained a “buy” rating. Trading volume surged 141% above average, with the stock closing near $274.37.
• Analyst sentiment remains broadly positive but mixed: 11 analysts rate Teradyne a Buy and five rate it a Hold, producing a “Moderate Buy” consensus and an average price target of $405.86.
• Fundamentals were strong in the latest quarter, with revenue up 69.8% year over year to $1.31 billion and EPS of $2.29 exceeding estimates. However, CEO insider selling and elevated valuation concerns may be weighing on investor sentiment.

Teradyne, Inc. (NASDAQ:TER - Get Free Report) shares dropped 7.4% on Friday after UBS Group lowered their price target on the stock from $485.00 to $430.00. UBS Group currently has a buy rating on the stock. Teradyne traded as low as $266.36 and last traded at $274.37. Approximately 8,613,421 shares changed hands during mid-day trading, an increase of 141% from the average session volume of 3,567,167 shares. The stock had previously closed at $296.23.

A number of other research firms have also weighed in on TER. Zacks Research lowered shares of Teradyne from a "strong-buy" rating to a "hold" rating in a research note on Monday, September 28th. Weiss Ratings upgraded Teradyne from a "hold (c+)" rating to a "buy (b-)" rating in a research report on Tuesday, September 29th. Cantor Fitzgerald reaffirmed an "overweight" rating and issued a $550.00 price target on shares of Teradyne in a report on Wednesday, July 29th. Morgan Stanley lifted their price target on Teradyne from $387.00 to $397.00 and gave the company an "equal weight" rating in a research report on Thursday, July 30th. Finally, Robert W. Baird lowered Teradyne from an "outperform" rating to a "neutral" rating and set a $420.00 price objective on the stock. in a research note on Friday, August 21st. Eleven equities research analysts have rated the stock with a Buy rating and five have issued a Hold rating to the stock. According to data from MarketBeat, the stock currently has an average rating of "Moderate Buy" and an average price target of $405.86.

Insider Buying and Selling

In related news, CEO Gregory Smith sold 4,000 shares of the company's stock in a transaction that occurred on Thursday, October 15th. The shares were sold at an average price of $341.28, for a total transaction of $1,365,120.00. Following the sale, the chief executive officer owned 104,495 shares of the company's stock, valued at approximately $35,662,053.60. This represents a 3.69% decrease in their position. The transaction was disclosed in a legal filing with the SEC, which is accessible through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold a total of 12,000 shares of company stock worth $4,416,440 over the last three months. 0.19% of the stock is currently owned by insiders.

Key Headlines Impacting Teradyne

Here are the key news stories impacting Teradyne this week:

• Positive Sentiment: Teradyne’s Q3 results and outlook highlighted robust AI exposure: revenue reached $1.31 billion, while management cited expanding compute programs, record memory-test revenue and capacity investments as drivers of potential 2027 growth. Teradyne Q3 Earnings Call Highlights AI Demand and 2027 Growth Plans
• Positive Sentiment: Northland Securities raised its FY2026 EPS forecast to $9.40 from $9.34, above the $9.17 consensus estimate. It also lifted its Q2 2027 estimate to $2.63 from $2.50, suggesting confidence in medium-term earnings momentum.
• Positive Sentiment: UBS maintained a “buy” rating despite reducing its price target to $430 from $485, leaving substantial implied upside based on the reference price. UBS Teradyne price-target update
• Neutral Sentiment: Analyst revisions were mixed: Northland lowered its Q1 2027 EPS forecast to $2.27 from $2.59 and trimmed Q4 2026 estimates slightly to $2.10 from $2.11, while raising full-year 2026 and Q2 2027 forecasts.
• Neutral Sentiment: Teradyne’s substantial multiyear rally and elevated valuation have increased investor focus on whether future AI-driven cash flows are already reflected in the stock price. Teradyne Stock May Be Above Fair Value Despite Record AI Demand
• Negative Sentiment: Put-option volume was unusually high, with 15,675 puts traded—about 101% above average—indicating increased hedging or bearish speculation.

Institutional Inflows and Outflows

A number of hedge funds have recently made changes to their positions in TER. BlackRock Inc. purchased a new stake in Teradyne during the 2nd quarter valued at $9,404,408,000. Andar Capital Management HK Ltd purchased a new position in shares of Teradyne in the second quarter valued at about $37,800,000. State Street Corp increased its position in shares of Teradyne by 4.6% in the second quarter. State Street Corp now owns 7,290,460 shares of the company's stock valued at $3,527,416,000 after acquiring an additional 320,034 shares during the period. Van ECK Associates Corp increased its position in shares of Teradyne by 5.0% in the second quarter. Van ECK Associates Corp now owns 2,607,914 shares of the company's stock valued at $1,261,813,000 after acquiring an additional 123,549 shares during the period. Finally, UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC raised its stake in shares of Teradyne by 0.6% during the second quarter. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC now owns 1,978,124 shares of the company's stock valued at $957,096,000 after acquiring an additional 12,659 shares during the last quarter. 99.77% of the stock is currently owned by hedge funds and other institutional investors.

Teradyne Price Performance

The stock has a market capitalization of $42.90 billion, a P/E ratio of 31.50, a P/E/G ratio of 0.63 and a beta of 1.75. The firm's 50 day moving average price is $366.38 and its 200 day moving average price is $348.15.

Teradyne (NASDAQ:TER - Get Free Report) last posted its earnings results on Wednesday, October 28th. The company reported $2.29 earnings per share (EPS) for the quarter, topping the consensus estimate of $2.09 by $0.20. Teradyne had a return on equity of 43.81% and a net margin of 27.46%. The company had revenue of $1.31 billion for the quarter, compared to analysts' expectations of $1.27 billion. During the same period last year, the firm earned $0.85 earnings per share. Teradyne's quarterly revenue was up 69.8% on a year-over-year basis. On average, equities research analysts forecast that Teradyne, Inc. will post 9.17 earnings per share for the current year.

Teradyne Dividend Announcement

The firm also recently disclosed a quarterly dividend, which was paid on Friday, September 25th. Stockholders of record on Friday, September 4th were given a $0.13 dividend. This represents a $0.52 dividend on an annualized basis and a dividend yield of 0.2%. The ex-dividend date was Friday, September 4th. Teradyne's dividend payout ratio (DPR) is currently 7.13%.

Teradyne Company Profile

Teradyne, Inc develops and supplies automated test equipment and industrial automation products. Its systems help manufacturers test the functionality, performance, and reliability of semiconductor devices, electronic systems, wireless products, and other complex products throughout the production process.

The company's product portfolio includes semiconductor test systems, memory and system-level test equipment, and solutions for printed circuit boards and electronic products. Teradyne also provides collaborative robots through Universal Robots and autonomous mobile robots through Mobile Industrial Robots (MiR), supporting applications such as assembly, material handling, machine tending, packaging, and warehouse logistics.

Founded in 1960 and headquartered in North Reading, Massachusetts, Teradyne serves customers worldwide, including semiconductor manufacturers, electronics producers, automotive companies, and industrial businesses.

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