TER to Post Q3 Earnings: Should You Buy the Shares or Steer Clear?

Barchart · 10/21 13:26

Teradyne TER is scheduled to report its third-quarter 2024 results on Oct. 23.

For the third quarter, TER expects revenues between $680 million and $740 million. It anticipates non-GAAP earnings per share (EPS) between 66 cents and 86 cents.

The Zacks Consensus Estimate for third-quarter EPS is pegged at 78 cents, unchanged in the past 30 days. This suggests a 2.50% decline from the figure reported in the year-ago quarter.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar

Teradyne, Inc. Price and EPS Surprise

Teradyne, Inc. Price and EPS Surprise

Teradyne, Inc. price-eps-surprise | Teradyne, Inc. Quote

The Zacks Consensus Estimate for sales is pegged at $714.07 million, indicating an increase of 1.47% from the year-ago quarter’s reported value.

TER’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average being 22.14%.

Let’s see how things have shaped up for the upcoming announcement:

Factors to Note

Teradyne’s third-quarter 2024 performance is expected to have benefited from strong demand for AI applications in semiconductor testing and the anticipated growth in the robotics segment.

The continued strength in AI-driven demand, particularly in ADAS (Advanced Driver Assistance Systems), compute networking and HBM (High Bandwidth Memory), is expected to have boosted TER’s performance in the third quarter. The demand for AI applications is contributing significantly to both memory and compute sectors.

Teradyne expects a significant increase in the Total Addressable Market (TAM) for memory tests, with an expected growth of $1.2-$1.3 billion in the to-be-reported quarter, driven mainly by stronger demand for HBM. The upside is expected to have contributed positively to Teradyne’s performance in the third quarter.

Teradyne’s Advanced Robotics business is expected to have reflected sequential growth in the to-be-reported quarter, particularly from new product launches like the AI-powered MiR1200 Pallet Jack and the ongoing expansion of high-payload cobots (UR20 and UR30). The company aims for 10-20% robotics growth in 2024.

The OEM solutions channel for UR is growing rapidly, with more than 70% growth in the first half of 2024 compared to the first half of 2023. The expansion of OEM partners using cobots in AI-based logistics solutions is expected to have further boosted Robotics revenues in the to-be-reported quarter.

However, excess inventory is expected to have impacted semiconductor growth negatively and may have been a significant challenge for the company.

What Our Model Says

According to the Zacks model, the combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

Teradyne has an Earnings ESP of 0.00% and carries a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are some companies worth considering, as our model shows that these have the right combination of elements to beat on earnings in their upcoming releases:

Reddit  RDDT has an Earnings ESP of +72.10% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Reddit shares have gained 60.4% year to date. RDDT is set to report its third-quarter 2024 results on Oct. 29.

Carrier Global CARR has an Earnings ESP of +1.18% and a Zacks Rank of #2 at present.

Carrier Global shares have gained 42% year to date. CARR is set to report its third-quarter 2024 results on Oct. 24.

Cognizant Technology Solutions CTSH has an Earnings ESP of +2.86% and a Zacks Rank #3.

Cognizant’s shares have gained 3.3% year to date. CTSH is set to report its third-quarter 2024 results on Oct. 30.

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Cognizant Technology Solutions Corporation (CTSH): Free Stock Analysis Report
 
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