Teradyne (NASDAQ:TER) Shares Gap Up - Should You Buy?

Key Points

• Teradyne shares gapped up at the open, rising from a prior close of $409.35 to $429.23, reflecting strong short-term momentum in the stock.
• Recent analyst activity has been broadly positive, including upgrades and higher price targets; the consensus rating is Moderate Buy with an average target price of $339.80.
• The company posted strong quarterly results, beating EPS and revenue expectations, while also raising its quarterly dividend from $0.12 to $0.13 per share.

Teradyne, Inc. (NASDAQ:TER - Get Free Report)'s share price gapped up before the market opened on Wednesday . The stock had previously closed at $409.35, but opened at $429.23. Teradyne shares last traded at $429.27, with a volume of 338,630 shares.

Analyst Upgrades and Downgrades

Several brokerages have commented on TER. Evercore set a $370.00 price objective on shares of Teradyne in a report on Thursday, April 30th. UBS Group raised their price objective on shares of Teradyne from $325.00 to $440.00 and gave the stock a "buy" rating in a report on Tuesday, April 21st. Wall Street Zen upgraded shares of Teradyne from a "hold" rating to a "buy" rating in a report on Saturday, February 21st. Weiss Ratings upgraded shares of Teradyne from a "hold (c)" rating to a "buy (b-)" rating in a report on Monday, May 4th. Finally, Morgan Stanley set a $387.00 price objective on shares of Teradyne in a report on Thursday, April 30th. One analyst has rated the stock with a Strong Buy rating, twelve have given a Buy rating and three have assigned a Hold rating to the company. Based on data from MarketBeat.com, Teradyne presently has an average rating of "Moderate Buy" and an average target price of $339.80.

Teradyne Price Performance

The stock's 50 day simple moving average is $368.69 and its two-hundred day simple moving average is $295.62. The firm has a market cap of $66.33 billion, a P/E ratio of 78.54, a P/E/G ratio of 1.78 and a beta of 1.79.

Teradyne (NASDAQ:TER - Get Free Report) last announced its earnings results on Wednesday, April 29th. The company reported $2.56 earnings per share for the quarter, beating analysts' consensus estimates of $2.11 by $0.45. Teradyne had a net margin of 22.55% and a return on equity of 31.79%. The business had revenue of $1.28 billion during the quarter, compared to the consensus estimate of $1.20 billion. During the same quarter last year, the firm earned $0.75 earnings per share. The business's revenue for the quarter was up 87.0% on a year-over-year basis. Equities research analysts anticipate that Teradyne, Inc. will post 7.09 earnings per share for the current year.

Teradyne Increases Dividend

The firm also recently announced a quarterly dividend, which was paid on Friday, June 12th. Shareholders of record on Thursday, May 21st were paid a dividend of $0.13 per share. This is a positive change from Teradyne's previous quarterly dividend of $0.12. This represents a $0.52 dividend on an annualized basis and a dividend yield of 0.1%. The ex-dividend date of this dividend was Thursday, May 21st. Teradyne's payout ratio is 9.63%.

Insider Activity at Teradyne

In related news, VP Ryan Driscoll sold 680 shares of the firm's stock in a transaction that occurred on Thursday, May 7th. The shares were sold at an average price of $377.60, for a total transaction of $256,768.00. Following the completion of the sale, the vice president owned 7,665 shares of the company's stock, valued at $2,894,304. This trade represents a 8.15% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Shannon John Poulin sold 656 shares of the firm's stock in a transaction that occurred on Friday, May 22nd. The shares were sold at an average price of $355.00, for a total transaction of $232,880.00. Following the sale, the insider directly owned 15,722 shares of the company's stock, valued at $5,581,310. This trade represents a 4.01% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders sold 14,941 shares of company stock valued at $5,444,112 over the last 90 days. Corporate insiders own 0.19% of the company's stock.

Institutional Investors Weigh In On Teradyne

Institutional investors and hedge funds have recently made changes to their positions in the company. Norges Bank purchased a new stake in Teradyne during the 4th quarter valued at $398,777,000. Wellington Management Group LLP raised its stake in Teradyne by 13,949.4% during the 3rd quarter. Wellington Management Group LLP now owns 2,036,887 shares of the company's stock valued at $280,357,000 after buying an additional 2,022,389 shares during the last quarter. Aspex Management HK Ltd bought a new stake in shares of Teradyne during the 4th quarter valued at $199,723,000. Corient Private Wealth LLC grew its position in shares of Teradyne by 2,189.2% during the 4th quarter. Corient Private Wealth LLC now owns 1,075,916 shares of the company's stock valued at $208,254,000 after acquiring an additional 1,028,916 shares during the period. Finally, Alkeon Capital Management LLC grew its position in shares of Teradyne by 48.6% during the 3rd quarter. Alkeon Capital Management LLC now owns 2,872,910 shares of the company's stock valued at $395,427,000 after acquiring an additional 940,000 shares during the period. Institutional investors own 99.77% of the company's stock.

About Teradyne

Teradyne, Inc is a global supplier of automatic test equipment and related services principally used to test semiconductors, wireless products and complex electronic systems. Founded in 1960, the company is headquartered in North Reading, Massachusetts, and has a long history of developing capital equipment and software that help semiconductor manufacturers, electronics OEMs and contract manufacturers validate product performance and reliability during design and production.

The company's product portfolio centers on automatic test equipment (ATE) and system-level test solutions that address chip- and board-level validation, burn-in and reliability screening.

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