Teradyne (NASDAQ:TER) Shares Gap Up After Better-Than-Expected Earnings

Key Points

• Teradyne's stock experienced a notable gap up, opening at $105.73 after closing at $90.55, following a stronger-than-expected earnings report with an EPS of $0.57, surpassing the consensus estimate of $0.54.
• The company announced a $1.00 billion stock repurchase program, indicating management’s belief that its shares are undervalued.
• Despite a year-over-year revenue decline of 10.7%, Teradyne maintained a net margin of 19.86% and a return on equity of 20.06% during the last quarter.

Teradyne, Inc. (NASDAQ:TER - Get Free Report) shares gapped up prior to trading on Wednesday after the company announced better than expected quarterly earnings. The stock had previously closed at $90.55, but opened at $105.73. Teradyne shares last traded at $107.57, with a volume of 6,679,371 shares traded.

The company reported $0.57 EPS for the quarter, beating the consensus estimate of $0.54 by $0.03. The business had revenue of $651.80 million during the quarter, compared to analyst estimates of $649.02 million. Teradyne had a return on equity of 18.16% and a net margin of 16.59%. The company's revenue for the quarter was down 10.7% on a year-over-year basis. During the same quarter last year, the firm posted $0.86 earnings per share.

Teradyne Announces Dividend

The business also recently declared a quarterly dividend, which was paid on Friday, June 13th. Stockholders of record on Thursday, May 22nd were issued a dividend of $0.12 per share. The ex-dividend date was Thursday, May 22nd. This represents a $0.48 annualized dividend and a dividend yield of 0.5%. Teradyne's dividend payout ratio (DPR) is presently 16.61%.

Teradyne declared that its Board of Directors has authorized a share buyback program on Monday, April 28th that allows the company to repurchase $1.00 billion in shares. This repurchase authorization allows the company to reacquire up to 8.1% of its shares through open market purchases. Shares repurchase programs are generally an indication that the company's board believes its shares are undervalued.

Analyst Upgrades and Downgrades

Several research firms have recently weighed in on TER. Cantor Fitzgerald set a $105.00 price objective on shares of Teradyne and gave the company an "overweight" rating in a report on Tuesday, June 24th. Cowen reaffirmed a "buy" rating on shares of Teradyne in a research report on Wednesday. Stifel Nicolaus boosted their price target on Teradyne from $85.00 to $100.00 and gave the stock a "hold" rating in a report on Thursday. KeyCorp reaffirmed a "sector weight" rating on shares of Teradyne in a research report on Thursday, April 17th. Finally, Susquehanna cut their price objective on Teradyne from $155.00 to $133.00 and set a "positive" rating on the stock in a research report on Wednesday, April 30th. Two equities research analysts have rated the stock with a sell rating, six have given a hold rating, ten have given a buy rating and one has issued a strong buy rating to the company. Based on data from MarketBeat.com, the company presently has an average rating of "Moderate Buy" and a consensus target price of $114.44.

Insider Transactions at Teradyne

In other Teradyne news, CEO Gregory Stephen Smith sold 554 shares of the stock in a transaction that occurred on Wednesday, July 30th. The stock was sold at an average price of $105.73, for a total transaction of $58,574.42. Following the transaction, the chief executive officer owned 97,547 shares in the company, valued at approximately $10,313,644.31. This represents a 0.56% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. Corporate insiders own 0.16% of the company's stock.

Hedge Funds Weigh In On Teradyne

Several hedge funds and other institutional investors have recently made changes to their positions in TER. Covestor Ltd increased its holdings in shares of Teradyne by 12.3% in the fourth quarter. Covestor Ltd now owns 901 shares of the company's stock valued at $113,000 after purchasing an additional 99 shares during the last quarter. Snowden Capital Advisors LLC increased its stake in Teradyne by 2.8% during the fourth quarter. Snowden Capital Advisors LLC now owns 3,748 shares of the company's stock worth $472,000 after acquiring an additional 103 shares during the last quarter. Fulton Bank N.A. increased its stake in Teradyne by 4.3% during the second quarter. Fulton Bank N.A. now owns 2,722 shares of the company's stock worth $245,000 after acquiring an additional 113 shares during the last quarter. CIBC Private Wealth Group LLC increased its stake in Teradyne by 4.0% during the fourth quarter. CIBC Private Wealth Group LLC now owns 3,127 shares of the company's stock worth $429,000 after acquiring an additional 119 shares during the last quarter. Finally, HighTower Advisors LLC increased its stake in Teradyne by 1.0% during the first quarter. HighTower Advisors LLC now owns 12,528 shares of the company's stock worth $1,035,000 after acquiring an additional 124 shares during the last quarter. Hedge funds and other institutional investors own 99.77% of the company's stock.

Teradyne Price Performance

The firm has a 50 day simple moving average of $89.16 and a 200-day simple moving average of $93.29. The company has a market cap of $16.57 billion, a price-to-earnings ratio of 35.76, a PEG ratio of 4.74 and a beta of 1.70.

About Teradyne

Teradyne, Inc designs, develops, manufactures, and sells automated test systems and robotics products worldwide. It operates through four segments; Semiconductor Test, System Test, Robotics, and Wireless Test. The Semiconductor Test segment offers products and services for wafer level and device package testing of semiconductor devices in automotive, industrial, communications, consumer, smartphones, cloud, computer and electronic game, and other applications.