Teradyne Stock Plunges 12% in the Past 6 Months: Buy the Dip or Wait?

Core Viewpoint - Teradyne is experiencing underperformance due to softer demand in its non-semiconductor test businesses and challenges in the automotive sector, but it is strengthening its robotics position through partnerships and technological integration [1][2][7]. Financial Performance - For Q4 2024, Teradyne expects revenues between $710 million and$760 million, with non-GAAP earnings projected between 80 cents and 97 cents per share [5]. - The consensus estimate for Q4 earnings is 90 cents per share, indicating a year-over-year increase of 13.92% [6]. - In Q3 2024, Teradyne reported revenues of $737 million, a 5% year-over-year increase driven by strong AI-related demand and expanding robotics market opportunities [12]. Robotics Segment - Teradyne's Robotics business grew 8% year over year in Q3 2024, supported by new product launches such as heavy-payload robots and AI-powered pallet handling solutions [13][14]. - The collaboration with NVIDIA enhances Teradyne's automation solutions with advanced AI capabilities [3][14]. Market Position and Competition - Teradyne faces significant competition from traditional industrial robot manufacturers and emerging collaborative robot companies, which presents a challenge in maintaining market share [7][17]. - Despite the competition, Teradyne's diverse robotics portfolio and key partnerships are expected to benefit its topline growth [15]. Valuation and Stock Performance - Teradyne's stock has lost 11.8% over the past six months, underperforming the Zacks Computer & Technology sector, which rose by 8.5% [11]. - The forward 12-month Price/Sales ratio for Teradyne is 6.40, indicating a stretched valuation compared to its industry average of 5.01 [18].