What drives this testing equipment maker?
Teradyne makes automated test equipment used to test semiconductors and electronics. The company sells systems and related solutions that help customers validate performance and reliability in production and development settings. Its business is built around supplying specialized equipment rather than recurring consumer services. Teradyne operates at large-company scale, with a market value around USD 58.6 billion.
Are profits and cash flow holding steady?
FundamentalsFor 2025 (reported in USD), revenue reached about USD 3.19 billion, with EBIT of roughly USD 650 million and net income of about USD 554 million. Revenue grew 13.1% year over year, alongside TTM profitability that stayed elevated, including a 58.70% gross margin and a 26.47% operating margin.
Cash and financing stayed fairly clean. Cash ended the period at about USD 294 million against total debt of USD 200 million, while a cash flow proxy based on after-tax EBIT plus depreciation and amortization minus capital spending came in at roughly USD 458 million. Depreciation and amortization was about USD 111 million, and capital expenditures were around USD 224 million, keeping reinvestment meaningful but not overwhelming relative to operating earnings.
Is the market overpaying for growth?
DCF / MultiplesAt USD 374.31, the shares trade above the weaker DCF outcome but below the stronger outcomes in the model’s fair-value range. The trading multiples are also rich, with a 68.61x trailing P/E and 57.48x EV/EBITDA, which places a high price on continued earnings power.
Strong business, demanding price
TakeawayOperations are profitable, and cash generation is real. The balance sheet carries modest debt relative to cash. The price still asks a lot from future earnings. The case works if margins and cash conversion hold up. It weakens if profitability slips while valuation stays high.