Teradyne Shares Underperform Despite Strong Q1 Financial Results

North Reading, Massachusetts-based Teradyne, Inc. (TER) is a leading global supplier of automated test equipment and robotics solutions. With a market capitalization of $12.4 billion, the company operates in three main segments: Semiconductor Test, Robotics, and Other.

Market Performance Over the Past Year

In the last 52 weeks, TER shares have significantly underperformed compared to the broader market. Specifically, TER has dropped 32.4%, while the S&P 500 Index ($SPX) has gained 11.9%. Year-to-date, TER shares are down 34%, contrasting sharply with the S&P 500, which has seen a slight decline during the same period.

Furthermore, TER has lagged behind the Technology Select Sector SPDR Fund (XLK), which has reported a 10.8% increase over the past year and a 2.1% decline year-to-date.

Q1 Financial Results

Despite delivering strong financial results, Teradyne’s stock fell 2.5% in the trading session following the release of its Q1 results on April 28. The company reported revenue of $685.7 million, reflecting a 14.3% increase year-over-year, primarily supported by growth in the Semiconductor Test segment, particularly in System on a Chip (SoC) for mobile applications. This figure exceeded analysts’ expectations of $683.9 million. Adjusted earnings per share (EPS) reached $0.75, a 47.1% year-over-year increase and beating estimates by nearly 23%.

Guidance and Analyst Ratings

For Q2 2025, the company projects revenue between $610 million and $680 million, with adjusted EPS expected to range from $0.41 to $0.64. However, the decline in stock price can be attributed to the company’s decision not to reaffirm expectations beyond the second quarter.

For the fiscal year ending in December 2025, analysts project adjusted EPS for TER to decline by1.2% year-over-year, arriving at $3.18. Nevertheless, the company has a robust history of surpassing earnings estimates, having outperformed the consensus in each quarter of fiscal 2024.

Analyst Consensus and Price Targets

The consensus rating among the 15 analysts covering TER is a “Moderate Buy,” which is based on 10 “Strong Buy” ratings, three “Holds,” one “Moderate Sell,” and one “Strong Sell.” This assessment shows a slight decrease in bullish sentiment compared to three months ago when there were 12 “Strong Buy” ratings.

On April 30, Susquehanna analyst Mehdi Hosseini lowered TER’s price target to $133 but maintained a “Positive” outlook on the stock. Currently, Teradyne’s average price target of $99.50 suggests a 19.8% premium over current levels, while the highest target of $137 indicates a remarkable 64.9% upside potential.

On the date of publication, Aditya Sarawgi did not hold (either directly or indirectly) any positions in the securities mentioned in this article. All information and data in this article are provided solely for informational purposes. For more details, please refer to the Barchart Disclosure Policy here.

The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.