NEW YORK (
) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, attractive valuation levels and solid stock price performance. We feel these strengths outweigh the fact that the company shows weak operating cash flow.
Highlights from the ratings report include:
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 45.15% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, TER should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. When compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, TERADYNE INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
- TER's debt-to-equity ratio is very low at 0.13 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 3.13, which clearly demonstrates the ability to cover short-term cash needs.
- The revenue growth came in higher than the industry average of 6.5%. Since the same quarter one year prior, revenues rose by 18.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
Teradyne, Inc., together with its subsidiaries, provides automatic test equipment products and services worldwide. It operates in two segments, Semiconductor Test and Systems Test Group. The Semiconductor Test segment designs, manufactures, and markets semiconductor test products and services. The company has a P/E ratio of 10.5, equal to the average electronics industry P/E ratio and below the S&P 500 P/E ratio of 16.9. Teradyne has a market cap of $3.4 billion and is part of the
industry. Shares are up 30.3% year to date as of the close of trading on Wednesday.
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