$TER Due Diligence — Teradyne Inc
Buy · 8/10 — full report on Stockato.
- Price: $450.74
- P/E: 79.41
- Market cap: $66.9B
- Revenue (TTM): $3.8B
- Profit margin: 23%
VERDICT: BUY
SCORE: 8/10
CONFIDENCE: HIGH — based on signal agreement
COMPANY OVERVIEW
Teradyne designs and manufactures automatic test equipment for semiconductors, focused on AI, memory (HBM), advanced packaging, and compute. The $66.9B market-cap firm sits at the center of rising test complexity driven by chip density and AI accelerators.
KEY FUNDAMENTALS
TTM revenue $3.79B (+87% YoY quarterly), EBITDA $1.16B, 22.6% net margin, 37.6% operating margin. PE 79.4x, forward PE 60.6x, EV/EBITDA 58.6x (premium to peers). Analyst consensus: 12 Buy / 5 Hold / 1 Sell, average target $389.88 (13% below spot). Short interest rose 27% MoM to 4.4% of shares.
BULL CASE
- BofA raised PT to $525 (from $365, Buy); Baird to $446 (from $350, Outperform) on expanding AI/memory test TAM.
- Q1 2026 revenue +87% YoY, quarterly earnings growth +315% YoY; AI segment gross margins hit record 60.9%.
- Tokyo Electron partnership (June 8) for wafer-level test on Blackwell/Rubin GPUs locks in high-margin advanced packaging.
- Options flow shows $7.08M bullish premium (71%) vs $2.95M bearish across 30 alerts.
BEAR CASE
- Current price 16% above consensus target; trailing PE 79x leaves little margin if growth moderates.
- Short interest jumped 1.48M shares (+27% MoM) to 6.88M.
- Volume today only 26% of 20-day average despite 5.5% rally, suggesting thin follow-through.
- Robotics segment continues to lag stated targets per management commentary.
OPTIONS POSITIONING
BULLISH_FLOW with 71% bullish premium ($7.08M calls vs $2.95M puts across 30 alerts, net +$4.13M directional). IV skew neutral (-0.05pp). Largest trades: $1595k BOUGHT CALL $500 2026-08-21 SWEEP; $1582k SOLD PUT $400 2026-10-16; $755k SOLD CALL $500 2026-07-17 SWEEP; $747k BOUGHT CALL $460 2026-07-17; $715k SOLD PUT $470 2026-07-17. Flow aligns with fundamental momentum and analyst upgrades rather than hedging.
X / SOCIAL CHATTER
BofA and Baird PT raises reflect expanding semiconductor test TAM tied to AI/memory complexity. "@ThePupOfWallSt: $TER is getting major target raises... BofA lifted to $525 from $365... The bigger story is the expanding opportunity across memory, data centers, autos, and industrial markets." June 8 Tokyo Electron partnership secures wafer-level test for Blackwell/Rubin GPUs and pushes segment margins to 60.9%. No credible contrarian posts identified.
MANAGEMENT CREDIBILITY
8.5/10 credibility score. Delivered beats or high-end guidance in Q2-Q4 2024 and Q1 2026 with transparent AI pivot commentary and no repeated excuses. Minor deduction only for Robotics execution delays.
KEY CATALYSTS
Next earnings (late July), continued AI/HBM order visibility, potential further PT raises.
KEY RISKS
Valuation compression if AI capex slows; rising short interest; thin intraday volume.
BOTTOM LINE
Teradyne’s 5.5% intraday surge is driven by fresh analyst upgrades and the Tokyo Electron AI partnership. Bullish options flow and 8.5/10 management track record support continued outperformance, though the stock now trades well above consensus targets.
How TER trades
15% below its 52-week high; worst drawdown in the past year 34%.
Moved 11.5% on average (absolute) across the last 8 earnings reports.
Ahead of SPY by 12.6 pts over 3 months.
Trades as a high-beta name: β 2.5 to QQQ, 5.9× SPY's volatility.
Realized volatility is 72% over 20 days, in line with its 1-year 77%.
One-year beta: 3.27 to SPY, 2.52 to QQQ (data-vendor beta 1.75).
Correlation of daily returns: SPY 0.4 (60 days) / 0.55 (1 year); QQQ 0.64 (60 days) / 0.65 (1 year); IWM 0.47 (60 days) / 0.58 (1 year); SMH 0.86 (60 days) / 0.78 (1 year); 10y yield (daily change) -0.05 (60 days) / -0.14 (1 year).
Realized volatility: 72% (20 days), 76% (60 days), 77% (1 year).
Maximum drawdown over the past year -34%; -15% from the 52-week high.
TER options and volatility
25-delta puts trade 5.0 vol points above calls in the nearest monthly expiry.
ATM implied vol runs 93% at 1 day to 67% at 190 days (inverted).
Options price 0.86× the last 20 days' realized volatility.
The first expiry after earnings (2026-10-30, 22 days out) prices ±15.4%, which also covers 22 days of ordinary movement; the average move on earnings day itself has been 11.5%.
Dealers are long gamma; call wall 440.0, put wall 400.0.
Options-implied expected moves: this week (2026-10-09): ±$16.23 (±3.94%); next monthly (2026-10-16): ±$30.13 (±7.32%); earnings expiry (2026-10-30): ±$63.61 (±15.45%).
Options data as of 2026-10-08 07:17 UTC.