Teradata Corporation (TDC)
Valuation Overview•Is Teradata Corporation Overvalued or Undervalued?
Trading at a discount compared to peers, but the underlying intrinsic cash flows struggle to support the current price.
Moderate quality score of 66/100, reflecting stable operating margins and manageable leverage.
Analysts remain bullish, forecasting further upside expansion with consensus targets suggesting solid gains.
Verdict: Solid fundamental quality, though solvency presents a headwind.
Wall Street is broadly bullish, projecting solid upside. This is paired with healthy capital returns, driven predominantly by aggressive share repurchases.
Returns capital exclusively via buybacks — no active dividend
TDC exhibits elite business quality, driven by exceptional capital efficiency and highly lucrative margins (highlighted by a massive 52.4% ROIC). This is paired with a moderately leveraged but stable balance sheet.
The company is facing top-line contraction (-2.5% 3Y CAGR) paired with highly explosive earnings growth (63.3% EPS 3Y CAGR). Operating efficiency remains adequate with margins around 6.2%.
| Financial Metric | Trend (12Q) | Latest Qtr | 1Y Growth | 3Y CAGR | 5Y CAGR | 10Y CAGR |
|---|---|---|---|---|---|---|
| Revenue | $444.0M | -5.0% | -2.5% | -2.0% | -4.1% | |
| EBITDA | -$36.0M | — | +5.4% | — | — | |
| Net Income | $335.0M | +14.0% | +57.9% | — | — | |
| EPS (Diluted) | $3.47 | +16.4% | +63.3% | +3.1% | — | |
| Free Cash Flow | $401.0M | +3.2% | -10.8% | +5.8% | — |
| Metric | TTM | 3Y Avg | 5Y Avg | 10Y Avg |
|---|---|---|---|---|
| Gross Margin | 60.2% | 60.3% | 60.6% | 55.5% |
| Operating Margin | 6.2% | 11.5% | 10.6% | 6.9% |
| Net Margin | 24.9% | 5.9% | 5.4% | 3.7% |
| FCF Margin | 40.9% | 17.5% | 19.5% | 14.9% |
| Quarter | EPS Est. | EPS Act. | Surprise | EPS | Rev |
|---|---|---|---|---|---|
| Q2'26Latest | $0.77 | $0.88 | +14.3% | ||
| Q1'26 | $0.55 | $0.74 | +34.5% | ||
| Q4'25 | $0.53 | $0.72 | +35.8% | ||
| Q3'25 | $0.41 | $0.47 | +14.6% | ||
| Q2'25 | $0.57 | $0.66 | +15.8% | ||
| Q1'25 | $0.44 | $0.53 | +20.5% | ||
| Q4'24 | $0.56 | $0.69 | +23.2% | ||
| Q3'24 | $0.48 | $0.64 | +33.3% |
Total return is +40.4% (1Y), outperforming the benchmark by +15.4%
| Period | Total Return | vs S&P 500 (Alpha) | Dividend Contribution |
|---|---|---|---|
| YTD | +4.0% | -5.3% | — |
| 1Y | +40.4% | +15.4% | — |
| 3YCAGR | -15.7% | -34.4% | — |
| 5YCAGR | -7.2% | -19.9% | — |
| 10YCAGR | +0.9% | -12.3% | — |
The S&P 500 is at 31.3x trailing P/E — Expensive relative to historical averages.
Quick answers to common questions about Teradata Corporation (TDC) valuation, health, and returns.
Teradata Corporation is estimated to be overvalued under our discounted cash flow framework. relative multiples indicate the stock is Limited: Cheap versus peers compared to industry peers. overvalued (implying -19.9% downside from DCF intrinsic value of $24.75)
Teradata Corporation has multiple valuation anchors: DCF Intrinsic Value: $24.75 | Peer Relative Fair Value: $162.22 | Wall Street Analyst Target: $34.75 (implying +12.5% upside). A convergence of these signals offers higher conviction.
Teradata Corporation displays good financial health with a composite quality score of 66/100, supported by a Altman Z-Score of 0.5 (distress zone), Piotroski F-Score of 7/9, Return on Invested Capital (ROIC) of 52.4%.
Teradata Corporation returns capital via buybacks instead of dividends, carrying a 4.8% buyback yield and reducing outstanding shares by -1.6% in the last 12 months.
Teradata Corporation's current growth trajectory is Decelerating. The company achieved -5.0% 1Y revenue growth and +16.4% 1Y EPS growth, compared to its 3Y revenue CAGR of -2.5%.
Wall Street consensus is Hold based on 47 analysts, beating EPS expectations in 100% of recent quarters with a 12-quarter streak. The consensus price target represents a +12.5% change from current levels.
Investment risks for Teradata Corporation include: -35.2% 1-year max drawdown, high beta (1.45x market volatility), elevated distress risk. Volatility risk is characterized by a beta of 1.45x.
No. These computations are purely quantitative model outputs for informational purposes. They do not account for qualitative management shifts or macro events. Always consult a licensed RIA before buying or selling shares.
Disclaimer: This page is for informational purposes only and does not constitute financial advice. All valuation models, scores, and target estimates are automated computations under stated assumptions and should not be relied upon as the sole basis for any investment decision.