Teradata (TDC)
NYSEInformation TechnologySoftware - InfrastructureSnapshot 2026-09-04
$28.05-2.57%
Close 2026-09-04 · 1-day change
NYSEInformation TechnologySoftware - InfrastructureSnapshot 2026-09-04
Broken: Primary pillar broken — Cash from operations remains strong near $320M+ in FY26: FCF $330M-$350M vs $320M target.
Teradata is growing revenue about 6% yearly, supported by new products and credit for growth. Cash from operations rose sharply to $401M, showing strong cash flow. EPS guidance for 2026 is raised to about $4.27 per share. The company trades cheap with a P/E near 13 and a free cash flow yield of 19%.
Operating income is declining, falling from $39M to -$36M recently, showing cost issues. Revenue growth is expected to be flat or slightly negative next year. Employee morale may suffer due to no raises, risking productivity and retention.
The price is about 52% below our fair value near $76, reflecting expectations of flat revenue growth. Our view is more optimistic on cash flow and EPS growth, expecting better execution on revenue and cash generation.
Breaks if: Cash from operations falls below $310M in FY26
Breaks if: EPS falls below $4.22 in FY26
Breaks if: Operating income remains negative or worsens over next 4 quarters
Breaks if: YoY revenue growth falls below -1% in FY26
This is not a price target or investment advice.
A long-form read on the 1–3 year hold thesis. It updates when the weekly evidence changes.
This investment represents a durable compounder with a focus on increasing recurring revenue and improving margins. The current thesis state is intact, supported by recent positive financial performance and management execution.
The valuation is considered cheap compared to peers, with a low expectations gap. The market seems to have priced in some fragility due to weak execution quality, but overall, the stock is justified at its current level.
Fundamentals are likely to show continued modest growth in recurring revenue and operating income, as management remains focused on these areas. There is a low probability of missing earnings expectations, but recent industry trends suggest caution.
The thesis hinges on TDC's ability to maintain guidance and deliver on management's priorities. Additionally, external factors like potential interest rate cuts and performance from sector leaders could influence TDC's trajectory.
The outlook for TDC over the next 1 to 3 years appears stable, with ongoing improvements in key financial metrics. Not investment advice.
The most important moves since the prior daily snapshot.
Mixed, the news cuts both ways. The latest earnings beat supports the read. However, there are concerns about recurring revenue growth. Weaker guidance impacts expectations for future revenue.
as of 2026-09-04
Review the evidence to watch, what would become a concern, and what would make it less concerning.
Not investment advice. Scores describe historical and current data; they are not forecasts of future returns. Consult a licensed advisor before making investment decisions.