Teradata Corp (TDC) stock analysis

P/E below its 5-year median

Teradata's P/E of 7.0 is below its own 5-year median of 38.4.

P/E below the industry

Teradata's P/E of 7.0 is below the Computer Programming, Data Processing, and Other Computer Related Services median of 27.6.

EV/EBITDA above its 5-year median

Teradata's EV/EBITDA of 12.3 is above its 5-year median of 11.8.

P/B above the industry

Teradata's price-to-book of 5.05 is above the Computer Programming, Data Processing, and Other Computer Related Services median of 3.32.

Trading below fair value

The share price of $33.28 is below our fair value estimate of $38.42.

Margin of safety under 20%

The price is 13.4% below fair value, less than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew -2.5% a year over the last three fiscal years, short of the 10% we look for.

EPS growing 10%+ a year

Diluted EPS grew 63.3% a year over the last three fiscal years.

Earnings growth accelerating

Net income grew 286% over the last twelve months, against a 5-year average of 0.2% a year.

Growing slower than the industry

Revenue grew 1.4% over the last twelve months; the Computer Programming, Data Processing, and Other Computer Related Services median is 9.6%.

Guidance lowered

Teradata lowered its third quarter of 2026 Total revenue outlook on Aug 4, 2026.

Gross margin improving

Gross margin was 60.5% over the last twelve months, against 59.0% a year earlier.

Return on equity over 15%

Return on equity was 110% over the last twelve months and averaged 46.3% over five years.

Return on capital over 10%

Return on invested capital was 41.0%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

Teradata's return on equity of 110% is above the Computer Programming, Data Processing, and Other Computer Related Services median of -1.2%.

Earnings grew over 5 years

Net income grew 0.2% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 27.2% over the last twelve months, against a 5-year average of 5.4%.

Net margin above the industry

Teradata's net margin of 27.2% is above the Computer Programming, Data Processing, and Other Computer Related Services median of -4.8%.

No debt

Teradata has no borrowings on its latest balance sheet.

Debt not rising

With no debt today, leverage cannot have risen.

Debt covered by cash flow

There is no debt to cover.

Interest well covered

Operating income covers interest expense 6.0 times.

Short-term assets don't cover short-term debts

Current assets are 0.94 times current liabilities.

Elevated bankruptcy risk

The Altman Z-score is 1.70; above 3 is the safe zone and below 1.8 the distress zone.

No dividend

Teradata has not paid a dividend in the last twelve months.

Yield against Treasuries

No dividend.

Yield against the market

No dividend.

Dividend stability

No dividend.

Earnings cover

No dividend.

Cash-flow cover

No dividend.