TER · Teradyne
Conviction · Low · more likely to lag the S&P 500 over the next three months
Wrong if: a daily close above $345.49
Note written ·
Price against the kill line
27.8% clear of its kill line on the 13 November 2026 close.
How to read this
This note expects the shares to lag the market, so its kill line sits above the price: a close above the red mark would prove the view wrong. Prices run from low on the left to high on the right. The dot is where the stock closed on 13 November 2026, left of the mark while it is below the line; a dot right of the mark has closed through it.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close above $345.49, on record since 11 November 2026. The shares are down 43.7% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close above $345.49, the 21 October 2026 close and just under the 50-day moving average, which would show the shares leading the S&P 500; fourth-quarter 2026 revenue above the $1.35 billion top of guidance would also prove the call wrong.
Research onlyNot in the portfolio.
Catalyst
Key figures from the filings · Technology
Quarter to 27 September 2026, filed 30 October 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 1,306
- Revenue, change on a year (%)
- +69.8
- Gross margin (%)
- 59.1
- Operating margin (%)
- 30.8
- Free cash flow, four quarters ($M)
- 1,025
- Price to earnings (×)
- 28.4
- Free-cash-flow yield (%)
- 2.6
All filed numbers
What Teradyne reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Gross margin (%) | Operating margin (%) |
|---|---|---|---|---|
| first filed | 1,306 | +69.8 | 59.1 | 30.8 |
| first filed | 1,329 | +103.9 | 59.8 | 32.9 |
| first filed | 1,283 | +87.0 | 60.9 | 36.9 |
| first filed | 1,083 | +43.9 | 57.2 | 27.1 |
| first filed | 769 | +4.3 | 58.4 | 18.9 |
| first filed | 652 | −10.7 | 57.2 | 13.9 |
| Pre-tax income ($M) | 404 |
| Net income ($M) four quarters: 1,373 | 342 |
| Diluted shares, change on a year (%) against the quarter to 28 September 2025 | −1.0 |
| Operating cash flow ($M) | 1,330 |
| Capital spending ($M) | 305 |
| Free cash flow ($M) | 1,025 |
| Cash and short-term investments ($M) | 461 |
| Debt ($M) | Not available |
| Net cash, cash less debt ($M) | Not available |
| Deferred revenue ($M) | Not reported |
| Backlog, orders not yet delivered ($M) −92.5% on a year | 131 |
| Receivables ($M) | 1,111 |
| Inventory ($M) | 575 |
| Shareholders' equity ($M) | 3,688 |
| Market value ($M) | 38,961 |
| Enterprise value, market value plus net debt ($M) | Not available |
| Enterprise value to sales (×) | Not available |
| Enterprise value to operating income (×) | Not available |
| Price to earnings (×) | 28.4 |
| Price to book value (×) | 10.6 |
| Free-cash-flow yield (%) | 2.6 |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 5.0% of shares outstanding sold short, 2.9 days of average trading to cover, −9.0% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $3.7M |
| 12 monthsfrom | $0 | $15.7M |
The thesis
Teradyne's shares are more likely to lag the S&P 500 over the next three months. The chip-test company's quarterly revenue has flattened near $1.3 billion, and the rebound since 6 November 2026 came from a new analyst initiation and a product launch. It did not come from new revenue. Nvidia's report on 17 November 2026 and Teradyne's fourth-quarter results in late January show whether growth resumes in 2027.
Teradyne reported third-quarter revenue of $1.306 billion and non-GAAP earnings per share (EPS) of $2.29 on 27 October 2026. Consensus estimates were $1.264 billion and $2.04, per Benzinga. The company guided fourth-quarter revenue to $1.25–1.35 billion and non-GAAP EPS to $1.95–2.25. Second-quarter revenue was $1.329 billion, so the guidance midpoint of $1.30 billion extends a plateau.
The market already prices in a slowdown. TIKR reported that the shares traded at 25 times forward earnings at the 2 November 2026 close, against a five-year average of 32 times. The shares closed at $265.78 on 11 November 2026, 45.5% below the 52-week high of $487.91 set on 30 June 2026. The rating is Low because the case for 2027 growth still rests on management's outlook, and the next reported quarter is guided flat.
Bullish and bearish views on Teradyne, Inc.
The bull case on Teradyne, Inc. (TER), in brief: third quarter beat on revenue and profit. The bear case: revenue has stopped rising.
Bull case
- Third quarter beat on revenue and profit. Revenue rose about 70% year over year to $1.306 billion, and Semiconductor Test contributed $1.07 billion at a 31.6% non-GAAP operating margin, per 247wallst on 28 October 2026.
- Jefferies sees share gains in compute test. Jefferies analyst Dushyant Ailani started coverage with a Buy rating and a $284 target on 11 November 2026, per Tradingpedia. He projects Teradyne's share of system-on-chip (SoC) test rising from about 27% in 2025 to 34% in 2030, and its SoC revenue rising from about $1.9 billion to $6.9 billion. The shares closed up 8.3% at $265.78 that day.
- A new market beyond the data center. Teradyne launched Omnyx Edge, an inline board-test platform for physical and edge AI devices, on 9 November 2026, per company news. The shares rose 12.7% to $246.00 that session, per MarketBeat. The company has not given a revenue figure for the product.
- Valuation has compressed. The 25 times forward earnings multiple at the 2 November 2026 close compares with about 70 times at the end of June, per TIKR on 3 November 2026. TIKR cites analyst EPS estimates of $9.44 for 2026 and $11.99 for 2027.
- Management points to 2027 growth. Zacks' summary of the 27 October 2026 call says management expects each 2027 quarter to grow over the matching 2026 quarter. Demand spans memory, hard-disk-drive test, high-speed interconnect and robotics.
Bear case
- Revenue has stopped rising. Quarterly revenue of $1.329 billion in the second quarter and $1.306 billion in the third leads into fourth-quarter guidance of $1.25–1.35 billion. Fourth-quarter EPS guidance of $1.95–2.25 is below the $2.29 reported for the third quarter.
- New and revised targets sit lower. Jefferies' $284 target on 11 November 2026 is well below the $405.86 consensus target MarketBeat reported on 9 November 2026. Baird cut its target to $385 from $420 and UBS cut to $430 from $485 on 29 October 2026.
- A few buyers drive orders. AI-linked demand was about 70% of revenue per the 28 April 2026 call, so order flow follows a small number of large chip designers and hyperscalers.
- Sector funding and policy worries. Forbes reported on 5 November 2026 that the chip selloff deepened on post-election concerns about the future of data-center buildouts. Teradyne closed at $212.74 that day.
- Insiders keep selling under plans. SEC Form 4 filings show CEO Gregory Smith sold 4,000 shares at $341.28 on 15 October 2026. Director Marilyn Matz sold 400 shares at $350.00 on 21 October 2026, and director Mercedes Johnson sold 166 shares at $275.44 on 2 November 2026, all under Rule 10b5-1 plans.
Price setup
Teradyne closed at $265.78 on 11 November 2026. The 3-month change is −35.2% from $410.52 on 13 August 2026. The 52-week high is $487.91, set intraday on 30 June 2026, and the 52-week closing low is $155.90 on 20 November 2025.
The recent low came in the 5 November 2026 chip selloff, when the shares closed at $212.74 after $250.99 the session before. They closed at $218.22 on 6 November 2026, $246.00 on 9 November 2026, $245.40 on 10 November 2026 and $265.78 on 11 November 2026. The rebound recovered the 5 November 2026 drop and reached a level above the 4 November 2026 close.
Both long averages sit far above the price. The 50-day moving average was $345.94 and the 200-day moving average $350.01 as of 11 November 2026. The 50-day average is now under the 200-day average. A return to that $346–350 zone would take the shares back to where they traded in late October, before the guidance reaction. 247wallst reported the shares at $298.64 at the open on 28 October 2026, a level the rebound has not yet reached.
Catalysts ahead
- 17 November 2026: Nvidia third-quarter fiscal 2027 results, with a conference call at 5 p.m. ET. Nvidia's data-center outlook drives demand for AI compute test; Jefferies' case for Teradyne rests partly on Nvidia dual-sourcing its chip test.
- ~27 January 2027 (est.): Teradyne fourth-quarter 2026 report, timed for late January per TIKR. Shows whether revenue landed inside the $1.25–1.35 billion guide and whether management's 2027 growth outlook holds in first-quarter guidance.
What would change the view
A daily close above $345.49, the 21 October 2026 close and just under the 50-day moving average, which would show the shares leading the S&P 500; fourth-quarter 2026 revenue above the $1.35 billion top of guidance would also prove the call wrong.
What it trades with
Teradyne trades with the chip-equipment and memory group. Results from Nvidia, Micron and Advantest shape its moves, and the 5 November 2026 selloff hit nearly all large chip names on the same day. Interest rates matter: the shares fell 13.3% on 14 September 2026 as the 10-year Treasury yield briefly topped 5%. Credit stress at AI-cloud operators such as CoreWeave is another outside driver, because it bears on how fast data-center buildouts are financed.
The evidence, claim by claim (8)
- Teradyne Q3 2026 revenue was $1.306B (about 70% above a year earlier) and non-GAAP EPS was $2.29, versus consensus of $1.264B and $2.04. Teradyne Q3 2026 results release; Benzinga · as of
- Teradyne guided Q4 2026 revenue to $1.25–1.35B and non-GAAP EPS to $1.95–2.25, after Q2 revenue of $1.329B. Teradyne Q3 2026 results release (8-K exhibit 99.1) · as of
- Semiconductor Test contributed $1.07B of Q3 2026 revenue; non-GAAP operating margin was 31.6%. 247wallst Q3 2026 earnings summary · as of
- Jefferies initiated Teradyne at Buy with a $284 target, projecting SoC test share rising from about 27% in 2025 to 34% in 2030; shares closed up 8.3% at $265.78. Tradingpedia, 11 November 2026 · as of
- Teradyne launched Omnyx Edge, an inline board-test platform for physical and edge AI; shares rose 12.7% to $246.00 that session. Teradyne company news; MarketBeat 9 November 2026 · as of
- Consensus rating was Moderate Buy (1 Strong Buy, 11 Buy, 4 Hold) with a consensus price target of $405.86. MarketBeat, 9 November 2026 · as of
- UBS cut its Teradyne target to $430 from $485 (Buy maintained); Baird cut its target to $385 from $420. Benzinga analyst updates · as of
- Teradyne traded at 25x forward earnings at the 2 November 2026 close versus a five-year average of 32x; analyst EPS estimates were $9.44 (2026) and $11.99 (2027). TIKR, 3 November 2026 · as of
Sources
- Teradyne Jumps After Jefferies Calls Out AI Test Upside · tradingpedia.com ·
- MarketBeat ·
- NVIDIA Sets Conference Call for Third Quarter Financial Results · investor.nvidia.com
- Teradyne Q3 2026: Six Straight Beats, but the Guidance Is What Moved the Stock · 247wallst.com ·
- Teradyne Lost 17% in a Week. UBS Still Sees 61% Upside · tikr.com ·
- TERADYNE, INC - Form 8-K - FY2026 · sec.gov
- Chipmaker Selloff Deepens Amid Post-Election Concerns For Future Of Data Centers · forbes.com ·
- Teradyne Q3 earnings call highlights AI demand and 2027 growth plans · zacks.com
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