Teradyne's Q2 Results Spark Analyst Revisions and Downgrade
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On Sat, 27 Jul, 12:05 AM UTC
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These Analysts Revise Their Forecasts On Teradyne Following Q2 Results - Teradyne (NASDAQ:TER)
Teradyne, Inc. TER reported better-than-expected second-quarter results but issued soft third-quarter guidance after the closing bell on Wednesday. Teradyne reported quarterly earnings of 86 cents per share which beat the analyst consensus estimate of 77 cents per share. The company reported quarterly sales of $729.879 million which beat the analyst consensus estimate of $701.204 million, according to data from Benzinga Pro. Teradyne said it sees third-quarter revenue of $680 million to $740 million versus estimates of $717.66 million. The company projects adjusted earnings of 66 cents to 86 cents per share, versus estimates of 86 cents per share. "In the second quarter, AI applications drove accelerated demand from both compute and memory customers, and our robotics business grew sequentially and year-over-year," said Teradyne CEO Greg Smith. "Overall, 2024 is shaping up as we expected, and we believe the deployment of edge AI will strengthen demand in our test and robotics businesses over the mid-term." Teradyne shares gained 1.4% to trade at $126.11 on Friday. These analysts made changes to their price targets on Imax following the announcement. Susquehanna analyst Mehdi Hosseini maintained Teradyne with a Positive rating and raised the price target from $130 to $145. Cantor Fitzgerald analyst C J Muse maintained the stock with a Neutral rating, while cutting the price target from $180 to $160. Craig-Hallum analyst Christian Schwab downgraded the rating for Teradyne from Buy to Hold and maintained the price target of $124. Read Next: Nvidia, Lockheed Martin And 2 Other Stocks Insiders Are Selling Market News and Data brought to you by Benzinga APIs
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Teradyne downgraded to Hold on lack of near-term catalyst: Craig-Hallum
Teradyne (NASDAQ:TER) was downgraded to Hold from Buy by Craig-Callum Capital Group on Friday due to a lack of catalysts as a recovery in the mobile, automotive and semiconductor test markets is not likely until 2025. Teradyne collapsed 13.38% on Thursday after releasing its latest financial results, which featured a weaker-than-expected outlook. The stock was up 2% during pre-market trading on Friday. "We believe shares will remain range bound until there is greater visibility into the broader market recovery in semi-test," said Craig-Hallum analysts Christian Schwab and Tyler Burmeister, in a Friday investor note. "Therefore, we are downgrading shares to a Hold and maintaining our $124 price target, based on 19x the midpoint of the company's mid-term EPS model of $6.50." Craig-Hallum also highlighted the better-than-expected Q2 results, as Teradyne posted revenue of $730M versus its own estimate of $695M and earnings per share of $0.86 versus its $0.75 estimate. "Management reiterated its outlook for the 2024 memory test market to $1.2-$1.3B, trending towards the higher end," Schwab said. "Strong test demand for HBM to support artificial intelligence builds continues, with Al also pulling demand for enterprise SSD flash test as well." Teradyne CEO Greg Smith also pointed to revenue gains related to AI-related demand Thursday morning's earnings call. "Continuing the trend we noted in the first quarter, Cloud AI demand drove compute revenue with considerable strength in networking devices," Smith said. "AI enabled data centers have a very high number of network connection points to support training large language models, which is changing the mix in this segment to include more networking silicon." Teradyne has a Hold rating from Seeking Alpha analysts, but a Buy rating from Wall Street analysts. It also has a Hold rating from Seeking Alpha's Quant system, which routinely beats the market. More on Teradyne Teradyne, Inc. (TER) Q2 2024 Earnings Call Transcript Teradyne, Inc. 2024 Q2 - Results - Earnings Call Presentation Teradyne: Valuation Unattractive Despite Expected Recovery Teradyne tanks on weaker-than-expected outlook despite Q2 beats Teradyne Non-GAAP EPS of $0.86 beats by $0.09, revenue of $730M beats by $29M
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Teradyne's second-quarter financial results have led to mixed reactions from analysts, with some revising their forecasts and others downgrading the stock. The semiconductor testing equipment manufacturer faces challenges in the near term.
Teradyne's Q2 Performance and Analyst Reactions
Teradyne, a leading provider of semiconductor testing equipment, recently released its second-quarter financial results, prompting a flurry of analyst activity. The company's performance has led to a mix of forecast revisions and a notable downgrade, reflecting the complex landscape of the semiconductor industry.
Analyst Forecast Revisions
Following Teradyne's Q2 results, several analysts have adjusted their outlook on the company. Notably, KeyBanc Capital Markets analyst Steve Barger maintained an Overweight rating on Teradyne shares but lowered the price target from $130 to $120 1. This adjustment suggests a more cautious yet still optimistic view of the company's prospects.
In a similar vein, Northland Capital Markets analyst Gus Richard reiterated a Market Perform rating while reducing the price target from $110 to $100. This move indicates a slightly more conservative stance on Teradyne's near-term performance 1.
Craig Hallum's Downgrade
In a more significant shift, Craig Hallum analyst Charles Trebing downgraded Teradyne from Buy to Hold, simultaneously slashing the price target from $120 to $100 2. This downgrade represents a substantial change in outlook, reflecting growing concerns about the company's immediate future.
Rationale Behind the Downgrade
The primary reason cited for Craig Hallum's downgrade is the perceived lack of near-term catalysts for Teradyne. Trebing pointed out that while the company's long-term growth story remains intact, the next 12-18 months could present challenges 2.
Industry Headwinds
The semiconductor industry is currently facing several headwinds, which are likely contributing to the cautious analyst sentiment. These challenges include ongoing supply chain disruptions, geopolitical tensions affecting trade, and fluctuating demand in key markets.
Teradyne's Market Position
Despite the near-term concerns, it's worth noting that Teradyne maintains a strong position in the semiconductor testing equipment market. The company's long-term prospects continue to be viewed favorably by some analysts, as evidenced by KeyBanc's maintained Overweight rating 1.
Investor Implications
For investors, these analyst revisions and the downgrade from Craig Hallum signal a need for caution when considering Teradyne stock. While the company's fundamental strengths remain, the lack of immediate growth catalysts and industry challenges may impact its performance in the coming months.
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