Teradyne Stock Plunges 12% in the Past 6 Months: Buy the Dip or Wait?

Teradyne TER shares have lost 11.8% in the trailing six-month period against the Zacks Computer & Technology sector’s rise of 8.5%.The underperformance can be attributed to softer demand in Teradyne’s non-semiconductor test businesses, particularly in wireless and production board testing. Additionally, the slower-than-expected ramp of Wi-Fi 7 and continued weakness in the automotive sector have been headwinds.However, TER’s prospects are expected to ride on its robust and diversified portfolio. In the third quarter of 2024, the company reported revenues of $737 million, which increased 5% year over year. The growth is driven by strong AI-related demand and expanding robotics market opportunities.Hence, investors should ask this question — is the dip the right time to invest in TER stock?Teradyne, Inc. Price and Consensus Teradyne, Inc. price-consensus-chart | Teradyne, Inc. QuoteStrong Robotics Portfolio Drives TER’s ProspectsTeradyne is strengthening its robotics position by leveraging its diverse portfolio and focusing on automation through partnerships and technological integration.In the third quarter of 2024, TER’s Robotics business grew 8% year over year. This was driven by new product launches, such as Universal Robots heavy-payload robots and MiR1200 Pallet Jack, powered by AI and NVIDIA NVDA technology. These product developments helped maintain growth even in difficult conditions.Further expanding its footprint in the Robotics segment, Teradyne collaborated with NVIDIA to integrate advanced AI capabilities into its automation solutions.TER’s collaboration with NVIDIA brings new AI capabilities to automation, enhancing UR’s cobots with faster path planning and introducing MiR’s AI-powered Pallet Jack for precise autonomous pallet handling.In September, Teradyne announced a collaboration between its Robotics division, Teradyne Robotics and Siemens to showcase advanced robotics solutions at MxD in Chicago, enhancing interoperability and AI-driven use cases in manufacturing automation.TER’s Raises Q4 GuidanceTeradyne’s diverse robotics portfolio and key partnerships are expected to benefit TER’s topline.For fourth-quarter 2024, Teradyne expects revenues between $710 million and $760 million. Non-GAAP earnings are expected to be between 80 cents and 97 cents per share.The Zacks Consensus Estimate for TER’s fourth-quarter 2024 revenues is pegged at $740.68 million, indicating year-over-year growth of 10.45%. The consensus mark for fourth-quarter earnings is currently pegged at 90 cents per share, unchanged over the past 30 days and indicating a year-over-year increase of 13.92%.Teradyne Faces Growing Competition in Robotics MarketDespite Teradyne’s strengths, the company is facing macroeconomic uncertainties in the robotics segment and significant competition from traditional industrial robot manufacturers like KUKA and ABB ABBNY and emerging collaborative robot companies such as Techman and Doosan, as well as autonomous mobile robot makers like Omron OMRNY, Rockwell, and Agilox.The competitive landscape presents a major hurdle for Teradyne as it strives to maintain its market share in the rapidly evolving robotics and automation industries.Shares of ABBNY and Omron have lost 0.9% and 3.3%, respectively, outperforming TER over the trailing six-month period.TER Stock – Buy, Sell or Hold?Teradyne stock is not so cheap, as the Value Score of D suggests a stretched valuation at this moment.The forward 12-month Price/Sales ratio for TER stands at 6.40, higher than its Zacks Electronics - Miscellaneous Products industry’s 5.01, reflecting a stretched valuation.Teradyne currently carries Zacks Rank #3 (Hold), suggesting that it may be wise to wait for a more favorable entry point in the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Zacks Naming Top 10 Stocks for 2025Want to be tipped off early to our 10 top picks for the entirety of 2025?History suggests their performance could be sensational.From 2012 (when our Director of Research Sheraz Mian assumed responsibility for the portfolio) through November, 2024, the Zacks Top 10 Stocks gained +2,112.6%, more than QUADRUPLING the S&P 500’s +475.6%. Now Sheraz is combing through 4,400 companies to handpick the best 10 tickers to buy and hold in 2025. Don’t miss your chance to get in on these stocks when they’re released on January 2.Be First to New Top 10 Stocks >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report NVIDIA Corporation (NVDA): Free Stock Analysis Report Teradyne, Inc. (TER): Free Stock Analysis Report Omron Corp. (OMRNY): Free Stock Analysis Report ABB Ltd (ABBNY): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks