From StockStory Media:

Teradyne (NASDAQ:TER) missed Q4 FY2023 revenue estimates with a 8.4% year on year decline to $670.6 million and underwhelming $565 million revenue guidance for Q1 2024. Despite a profit of $0.79 per share, down from $0.92 per share last year, the company’s stock fell 6.7%. CEO Greg Smith attributes weakening demand for System-on-a-Chip (SOC) test systems. Teradyne posts strong inventory levels at 2 Inventory Days Outstanding. While analysts expect an 8.5% revenue decline next quarter, they forecast 11.1% growth over the next 12 months. Predicted demand for new technologies and devices may see a turnaround for the company.

In this ever-changing semiconductor industry, soaring new technologies like AI and 5G create demand for chips at ever smaller sizes and complex architecture. Generative AI, in particular, is expected to revolutionize business operations, favoring certain semiconductor stocks. An increase in the coming year’s revenue despite a current downcycle signals an upturn for Teradyne.

Teradyne’s Q4 highlights saw Free Cash Flow up 46.3% from the previous quarter, while Gross Margin dipped from 57.5% to 56.6%, a 0.9% miss from analyst estimates. A drop in revenue from $731.8 million in the same quarter last year to $670.6 million has signaled a 3.6% decline over the past three years. Predicted quarterly and annual revenue growth may be an early indicator of an impending upswing.

Teradyne’s challenging quarter with missed analyst estimates highlights a mixed performance with an alarming revenue and EPS guidance miss. Stock is down 6.7% and trading at $97.5 per share. Long-term investors may use this as an opportunity to enter the stock, having patience through this cyclical industry.
Teradyne is a leading supplier of automated test equipment for semiconductors that is facing diverse market challenges including declining revenue figures, strong inventory performance, and missed guidance. A potential change in the tide could create an opportunity for potential investors who are patient enough to ride through the choppy waters.



Read more: Teradyne (NASDAQ:TER) Misses Q4 Analysts’ Revenue Estimates, Stock Drops