XVARY Composite Score
76
/ 100
Average
Combines growth, value, risk, and momentum factors into a single institutional-grade score.
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What it is
Teradyne makes the machines other companies use to catch bad chips and electronics before they ship.
How it gets paid
Last year Teradyne made $3.2B in revenue. semiconductor test was the main engine at $2.32B, or 73% of sales.
Why it's growing
Revenue grew 13.1% last year. The titan hp system level test platform is designed specifically to address the increasing performance demands of ai and cloud infrastructure devices.
What just happened
Teradyne reported $2.1B in quarterly revenue and $1.85 EPS, crushing the prior-year quarter.
At a Glance
B++ balance sheet — above average — nothing keeping you up at night
65/100 earnings predictability — reasonably predictable
58.0x trailing p/e — you're paying up for this one
0.3% dividend yield — cash in your pocket every quarter
32.5% return on capital — every dollar works hard here
XVARY composite: 76/100 — average
What They Do
Teradyne makes the machines other companies use to catch bad chips and electronics before they ship.
If your chip test process breaks, you do not just miss a quarter. You ship bad parts, eat recalls, and lose customers. That pain keeps Teradyne embedded. Its 32.5% return on capital (money invested in the business → profit generated from that money → proof customers stick around) says this is more than commodity hardware.
How They Make Money
$3.2B
annual revenue · their business grew +13.1% last year
semiconductor test
$2.32B
service
$0.35B
system test
$0.29B
wireless test
$0.13B
robotics
$0.11B
The Products That Matter
Tests chips before shipment
Automatic Test Equipment
$3.2B revenue · 100% of the business shown here
it generated the full $3.2B revenue base disclosed on this page and grew 13.1% last year. that means your entire TER thesis rides on continued spending for electronic test, not a diversified portfolio of unrelated businesses.
the whole story
Key Numbers
58.0x
trailing p/e
P/E → price versus last year's earnings → so what: you are paying 58 years of trailing profit for a cyclical equipment company.
$5.0B
2028 revenue
The 2028 revenue estimate is $5.0B versus $3.2B today, which is the growth case investors are prepaying for.
32.5%
return on capital
Return on capital → profit produced from money invested → so what: Teradyne turns each $1 invested into about $0.33 of operating profit.
20.4%
operating margin
Operating margin → profit after running the business → so what: about $0.20 of every sales dollar stays before interest and taxes.
Financial Health
B++
Strength
- balance sheet grade B++ — above average financial health
- risk rank 3 — safer than 50% of stocks
- price stability 25 / 100
- net profit margin 22.0% — keeps 22 cents of every dollar in revenue
- return on equity 32% — $0.32 profit for every $1 investors have put in
B++ — functional but not a standout on the balance sheet.
Total Return vs. Market
You invested $10000 in TER 3 years ago → it's now worth $21690.
The index would have given you $13920.
source: institutional data · total return
What Just Happened
beat estimates
Teradyne reported $2.1B in quarterly revenue and $1.85 EPS, crushing the prior-year quarter.
Revenue rose 174% vs. prior year and EPS rose 147%, based on the latest reported quarter. Gross margin came in at 58.7%, which shows the mix was strong even as demand stayed hot.
$2.1B
revenue
$1.85
eps
58.7%
gross margin
the number that mattered
The 174% revenue jump mattered most because it explains why investors are willing to pay a premium multiple right now.
-
Teradyne has delivered good top-line results.revenues have increased, thanks to higher sales of the company’s systemon-a-chip (soc) solutions for ai applications.
-
A jump in defense/aerospace sales has also been a plus.teradyne’s customers have ramped up production of a wide range of ai, accelerator, networking, memory, and power devices. in response, the business has enhanced its supply chain and accelerated manufacturing capacity growth at its factories to keep up with rising demand.
-
Assuming demand continues to grow, we estimate that this year’s top line will step up 10% to $3.1 billion.
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In 2026, revenues will likely advance by a larger 13% to $3.5 billion.
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Leadership has announced the launch of a new product.the titan hp system level test (slt) platform is designed specifically to address the increasing performance demands of ai and cloud infrastructure devices. this launch comes as shrinking process nodes and new architectures push the limits of device complexity, power consumption, and thermal management in high-volume manufacturing. the titan hp is purpose-built to test these devices in real-world conditions and is already in production at a number of large customers.
source: company earnings report, 2026
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What Could Go Wrong
The #1 risk is ai and semiconductor test demand cooling after the current buildout.
Med
Chip spending slows and testers get delayed
when semiconductor customers cut capital spending, test equipment orders usually move with them. teradyne does not have a consumer subscription buffer hiding underneath this.
100% of the $3.2B revenue base on this page is tied to electronic test demand.
Med
Export controls and taiwan concentration
the company sells into a global chip supply chain that is politically sensitive by definition. export restrictions, tariffs, or disruption around taiwan would hit orders and customer spending plans fast.
this is not a side issue when the entire $3.2B business depends on global semiconductor production staying open.
Med
The multiple leaves little room for a pause
at $202.99, TER trades at 58.0x trailing earnings and 45.1x the $4.50 fy2026 estimate. good results help. merely decent results can still hurt the stock.
the 3–5 year target midpoint is $173, or about 15% below the current price.
Med
New ai test platforms have to convert from promise to volume
the titan hp system is already in production at large customers, which is good. the harder part is turning that into sustained, high-volume demand across product cycles.
if the revenue base stays closer to the recent $769M quarterly run-rate than the $4B annual estimate, the growth case looks stretched.
with one core revenue engine and a premium multiple, teradyne is exposed to both operating risk and valuation risk at the same time.
Source: institutional data · regulatory filings · risk analysis
Pay Attention To
Earnings
Next quarterly print
the key question is whether revenue moves meaningfully above the current $769M quarterly level while margins hold near or above 17.4%.
Trend
Ai and cloud test demand
soc demand and titan hp adoption are the easiest real-time checks on whether the ai thesis is accelerating or just being repeated.
Metric
Path from $3.2B to $4B
fy2026 revenue is estimated at $4B. if the quarterly run-rate does not start climbing, that number stops looking like a base case and starts looking like hope.
Risk
Valuation versus targets
the stock sits at $202.99, but the 3–5 year midpoint target is $173. watch for analysts closing that gap with higher numbers — or the stock doing the closing for them.
Analyst Rankings
short-term outlook
top 5%
momentum score 1 — the highest rating. in human-speak, analysts think TER can outperform almost everything in the next stretch.
risk profile
average
stability score 3 — middle-of-the-road risk. not a bunker stock, not a small-cap rollercoaster.
chart momentum
top 20%
technical score 2 — the trend has been strong enough that analysts still expect above-average performance in the year ahead.
earnings predictability
65 / 100
earnings are predictable enough to model, but not smooth enough to trust blindly. this is what cyclical demand looks like.
Source: institutional data
Institutional Activity
456 buyers vs. 326 sellers in 3q2025. total institutional holdings: 0.2B shares.
Source: institutional data
Price Targets
3-5 year target range
$70
$275
$203
Current price
$173
Target midpoint · 15% from current · 3-5yr high: $400 (+95% · 19% ann'l return)
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