Core Viewpoint - The article discusses the reliability of Wall Street analysts' recommendations, particularly focusing on Teradyne (TER), and emphasizes the importance of using these recommendations in conjunction with other analytical tools for investment decisions [1][5]. Group 1: Brokerage Recommendations - Teradyne has an average brokerage recommendation (ABR) of 1.87, indicating a consensus between Strong Buy and Buy, based on 15 brokerage firms [2]. - Out of the 15 recommendations, 10 are Strong Buy, accounting for 66.7% of the total recommendations [2]. Group 2: Limitations of Brokerage Recommendations - Studies indicate that brokerage recommendations have limited success in guiding investors towards stocks with the highest price increase potential [5]. - Analysts often exhibit a positive bias in their ratings due to the vested interests of brokerage firms, leading to a disproportionate number of favorable ratings compared to negative ones [6][10]. Group 3: Zacks Rank vs. ABR - The Zacks Rank is a proprietary stock rating tool that classifies stocks into five groups based on earnings estimate revisions, providing a more reliable indicator of near-term price performance compared to ABR [8][11]. - The Zacks Rank is updated more frequently and reflects timely changes in earnings estimates, unlike the ABR, which may not be current [12]. Group 4: Teradyne's Earnings Outlook - The Zacks Consensus Estimate for Teradyne has declined by 1.6% over the past month to $3.32, indicating growing pessimism among analysts regarding the company's earnings prospects [13]. - This decline in earnings estimates has resulted in a Zacks Rank of 4 (Sell) for Teradyne, suggesting caution despite the Buy-equivalent ABR [14].

Group 1: Market Overview - The S&P 500 is down about 6% year-to-date, with significant declines from mid-February highs [1] - Many stocks have underperformed due to President Trump's tariffs affecting nearly every sector [1] Group 2: Deckers Outdoor - Deckers Outdoor is the worst-performing stock in the S&P 500, down approximately 46% this year [2] - Concerns over future growth and tariffs have negatively impacted investor sentiment [3] - Despite struggles, 12 out of 17 analysts recommend buying the stock, with an average price target suggesting a 70% upside [4][5] Group 3: Teradyne - Teradyne's stock is down 39%, primarily due to slowing demand for semiconductors and AI solutions [7][8] - The company cut its second-quarter guidance, indicating potential revenue declines of up to 10% [9] - Analysts remain optimistic, with 13 out of 17 rating the stock a buy and an average price target implying 48% upside [10][11] Group 4: ON Semiconductor - ON Semiconductor is down 38%, facing challenges in revenue growth due to high valuations and demand concerns in the semiconductor sector [12][13] - The company abandoned a $6.9 billion acquisition of Allegro Microsystems due to regulatory challenges [14] - Analysts are mixed, with 15 out of 24 recommending a buy, but concerns about revenue visibility have led to a downgrade from buy to neutral by B. Riley [15][16][17]

Financial Data and Key Metrics Changes - First quarter sales were $686 million, towards the high end of guidance, with non-GAAP EPS of $0.75 above the high end guide of $0.68 [17] - Non-GAAP gross margins were 60.6%, exceeding expectations due to product mix [17] - Non-GAAP operating expenses were $275 million, up year-over-year but down sequentially due to spending controls [18] Business Line Data and Key Metrics Changes - Semi Test revenue was $543 million, with SOC revenue contributing $406 million and memory revenue at $109 million [19] - Product Test revenue was $74 million, down 4% year-over-year, with wireless test revenue of $29 million up 20% year-over-year [20] - Robotics revenue was $69 million, declining both sequentially and year-over-year, with UR contributing $49 million and MiR $20 million [20] Market Data and Key Metrics Changes - 19% of revenue was shipped to China, 12% in support of multinational customers, and 7% for indigenous Chinese customers [23] - The company expects a significant sequential decline in memory revenue in Q2 as the market digests installed HBM test capacity [27] Company Strategy and Development Direction - The company is focusing on AI, verticalization, and electrification as primary industry drivers for future growth [5] - A strategic partnership with ADI was announced to deploy UR cobots in AMRs to support collaborative automation initiatives [13] - The company is actively managing expenses to generate operating leverage while continuing critical investments [12] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about the impact of trade policy on end market demand, particularly in mobile, automotive, and industrial segments [6][28] - Despite current uncertainties, management remains confident in long-term drivers of AI, electrification, and verticalization [29] - The company has historically emerged stronger from challenging macroeconomic periods and expects this trend to continue in 2025 [16] Other Important Information - The company has increased its share buyback target from $400 million in 2025 to up to $1 billion through the end of 2026, reflecting confidence in long-term plans [28] - The restructuring in the robotics division has reduced the operating breakeven revenue from $440 million to $365 million [21] Q&A Session Summary Question: Dynamics of tariff-related pushouts and pull-ins - Management noted that pull-ins are primarily affecting existing capacity, with pushouts mainly from customers in the auto and industrial sectors [33] Question: Update on gross margin and OpEx - Management indicated that gross margin guidance for the full year is not provided due to uncertainty, but the first half is expected to align with prior expectations [41][42] Question: SLT wins and AI accelerators - Management clarified that SLT wins are expected to drive significant revenue in 2026, with AI accelerators being incorporated into higher-level assemblies [48][50] Question: Impact of tariffs on competitive positioning - Management stated that there has been no significant competitive impact due to tariffs, and the competitive landscape remains stable [62] Question: Memory market dynamics - Management highlighted that mobile phone unit volume and new interface standards are key drivers for NAND demand [75] Question: Timing of large robotic order - The largest order in robotics history is expected to ship from Q1 into Q2, demonstrating the ability to sell combined products to strategic customers [53][57]

Financial Performance - Teradyne reported Q1 2025 revenue of $686 million, a 14% increase from $600 million in Q1 2024, driven primarily by Semiconductor Test[1][2][5]. - GAAP net income for Q1 2025 was $98.9 million, or $0.61 per diluted share, compared to $0.40 per diluted share in Q1 2024[1][2]. - Non-GAAP net income for Q1 2025 was $121.5 million, or $0.75 per diluted share, up from $0.51 per diluted share in Q1 2024[1][2]. - Operating income for Q1 2025 was $120.8 million, compared to $77.8 million in Q1 2024[11]. - The company experienced a gross profit of $415.3 million in Q1 2025, up from $339.3 million in Q1 2024[11]. - The company reported a gross profit margin of 60.6% for the quarter ended March 30, 2025, compared to 59.4% for the same period in 2024[18]. - Net income for the quarter ended March 30, 2025, was $98,896 thousand, a significant increase of 54% compared to $64,197 thousand for the same period in 2024[17]. - Cash flows from operating activities increased to $161,637 thousand for the quarter ended March 30, 2025, compared to $7,279 thousand for the same period in 2024[17]. Revenue Segmentation - Semiconductor Test revenue for Q1 2025 was $543 million, contributing significantly to overall growth[1]. - Robotics revenue for Q1 2025 was $69 million, indicating ongoing development in this segment[1]. Guidance and Projections - Guidance for Q2 2025 revenue is projected between $610 million and $680 million, with GAAP net income per diluted share expected to be between $0.35 and $0.58[2]. - GAAP second quarter revenue guidance is projected between $610 million to $680 million[22]. - GAAP net income per diluted share for the second quarter is expected to be $0.35, while non-GAAP net income per diluted share is projected at $0.41[22]. - The second quarter non-GAAP net income per diluted share is expected to be $0.64, excluding equity method investment amortization and acquired intangible assets amortization adjustments[22]. - The non-GAAP tax adjustments for the second quarter are projected to be $(0.01)[22]. Shareholder Actions - The board approved an increase in the share repurchase program from $400 million to up to $1 billion, to be completed by the end of 2026[3][5]. - The company repurchased common stock amounting to $157,475 thousand during the quarter ended March 30, 2025[17]. Assets and Liabilities - Total assets decreased slightly to $3,705,837 thousand as of March 30, 2025, from $3,708,714 thousand at December 31, 2024[16]. - Total current liabilities increased to $649,066 thousand as of March 30, 2025, from $624,579 thousand at December 31, 2024[16]. - The company’s total liabilities increased to $908,338 thousand as of March 30, 2025, from $889,420 thousand at December 31, 2024[16]. - Cash and cash equivalents decreased to $475,632 thousand at the end of the quarter, down from $553,354 thousand at the beginning of the period[17]. - The company’s equity method investment increased to $509,626 thousand as of March 30, 2025, compared to $494,494 thousand at December 31, 2024[16]. Restructuring and Expenses - For the quarter ended March 30, 2025, employee severance related primarily to Robotics restructuring, impacting approximately 150 employees, totaling $11.4 million[19]. - Total restructuring and other expenses for the quarter ended March 30, 2025, amounted to $14.5 million[19]. - Selling and administrative expenses for the quarter ended March 30, 2025, included costs related to a planned ERP system implementation[20]. - For the quarter ended March 31, 2024, selling and administrative expenses included an equity charge of $1.7 million for the modification of executives' retirement agreements[23]. Market Outlook - Teradyne's CEO highlighted long-term demand drivers including AI, electrification, and verticalization despite current market uncertainties[2].

Company Performance - Teradyne reported quarterly earnings of $0.75 per share, exceeding the Zacks Consensus Estimate of $0.61 per share, and up from $0.51 per share a year ago [1] - The earnings surprise for the quarter was 22.95%, and the company has surpassed consensus EPS estimates in all four of the last quarters [2] - Teradyne's revenues for the quarter were $685.68 million, surpassing the Zacks Consensus Estimate by 0.26%, and up from $599.82 million year-over-year [3] Future Outlook - The sustainability of Teradyne's stock price movement will depend on management's commentary during the earnings call [4] - Current consensus EPS estimate for the upcoming quarter is $0.57 on revenues of $650.57 million, and for the current fiscal year, it is $3.32 on revenues of $2.96 billion [8] - The estimate revisions trend for Teradyne is currently unfavorable, resulting in a Zacks Rank 5 (Strong Sell), indicating expected underperformance in the near future [7] Industry Context - The Electronics - Miscellaneous Products industry, to which Teradyne belongs, is currently in the bottom 40% of the Zacks Industry Rank [9] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Teradyne's performance [6]

Core Viewpoint - Teradyne (TER) is expected to report first-quarter 2025 earnings on April 28, with projected revenues between $660 million and $700 million and non-GAAP earnings between 58 cents and 68 cents per share, reflecting a year-over-year revenue increase of 14.02% [1][2] Financial Performance Expectations - The Zacks Consensus Estimate for revenues is $683.90 million, indicating a 14.02% increase from the previous year's reported value [1] - The consensus for first-quarter earnings is set at 61 cents per share, showing a 19.61% increase from the prior-year figure [2] Market Conditions Impacting Performance - The industrial automation market continues to show weakness, which is expected to negatively impact Teradyne's first-quarter performance [3] - The memory test market is anticipated to remain flat in 2025, affecting demand and performance [3] - Teradyne's wireless test business has faced challenges due to a slower rollout of WiFi 7 technology, likely impacting revenues in the first quarter [4] Positive Factors - Despite challenges, Teradyne benefits from strong demand in semiconductor testing and strategic partnerships, particularly with Infineon, which is expected to enhance its position in the power semiconductor market [5] - Growth in SoC and memory test revenues, driven by AI accelerator ASICs, networking, and HBM DRAM, is likely to contribute positively to the company's performance [5] Earnings Prediction Model - According to the Zacks model, Teradyne has an Earnings ESP of +2.52% but holds a Zacks Rank of 5 (Strong Sell), indicating lower odds of an earnings beat [6]

Wall Street analysts forecast that Teradyne (TER) will report quarterly earnings of $0.61 per share in its upcoming release, pointing to a year-over-year increase of 19.6%. It is anticipated that revenues will amount to $683.93 million, exhibiting an increase of 14% compared to the year-ago quarter.The current level reflects a downward revision of 0.4% in the consensus EPS estimate for the quarter over the past 30 days. This demonstrates how the analysts covering the stock have collectively reappraised thei ...

Teradyne (TER) is expected to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended March 2025. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price.The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on April 28. On th ...

Company Performance - Teradyne's stock closed at $73.65, reflecting a +1.88% increase from the previous day, outperforming the S&P 500's gain of 1.81% [1] - Over the last month, Teradyne's shares have decreased by 15.28%, underperforming the Computer and Technology sector's loss of 7.27% and the S&P 500's loss of 6.14% [2] Upcoming Earnings - Teradyne's earnings report is scheduled for April 28, 2025, with projected EPS of $0.61, indicating a 19.61% increase year-over-year [3] - The consensus estimate for revenue is $683.57 million, reflecting a 13.96% rise from the same quarter last year [3] - For the full year, earnings are projected at $3.38 per share and revenue at $2.99 billion, representing increases of +4.97% and +6.2% respectively from the prior year [4] Analyst Projections - Recent shifts in analyst projections for Teradyne should be monitored, as positive estimate revisions indicate optimism about the company's outlook [5] - The Zacks Rank system currently rates Teradyne as 5 (Strong Sell), with the consensus EPS estimate having decreased by 10.97% over the past month [7] Valuation Metrics - Teradyne is trading with a Forward P/E ratio of 21.4, which is a premium compared to the industry's average Forward P/E of 16.01 [8] - The company has a PEG ratio of 3.2, while the Electronics - Miscellaneous Products industry has an average PEG ratio of 1.41 [8] Industry Context - The Electronics - Miscellaneous Products industry is part of the Computer and Technology sector and currently holds a Zacks Industry Rank of 142, placing it in the bottom 43% of over 250 industries [9]

When deciding whether to buy, sell, or hold a stock, investors often rely on analyst recommendations. Media reports about rating changes by these brokerage-firm-employed (or sell-side) analysts often influence a stock's price, but are they really important?Let's take a look at what these Wall Street heavyweights have to say about Teradyne (TER) before we discuss the reliability of brokerage recommendations and how to use them to your advantage.Teradyne currently has an average brokerage recommendation (ABR) ...