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Stockchase Insights Teradyne Inc TER-Q BUY Jan 20, 2025

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research

TER does develop 'advanced robotic systems' so we would expect it to at least be involved in the sector. It spent $435M on research and development projects last year. The stock has had a good start to the year, up 10%. P/E is 43X. It has about $600M net cash and earnings growth is projected at 30% in 2025. The last quarter was very good and estimates have ticked higher in the last four weeks. We think it looks good for a higher growth thematic stock.
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BUY ON WEAKNESS

Sells test equipment for chips and for equipment. Very pricey, just off all-time highs. Over the next 6 months, you could probably get it closer to $110-120. Another one to watch is KEYS.

WAIT

Almost back to the level of fall 2020. Problems on profitability. Lower highs, lower lows. Bit of a bounce. Don't touch until you get above about $117.50. There's a big gap between $120-140, and you'll probably fill that in on one of these market rallies. Don't go beyond $140.

BUY

Though semis are down today, they are great companies making components that we all need. She owns a big position in Teradyne because it trades at a reasonable 16x, is profitable and offers great growth prospects. Ride them out for the long term.

BUY

43% earnings growth expected for 2023, though has a PE than some peers. Likes it and is holding on.

BUY

Is up 17% in May. They directly benefit from AI because they produce semi-testing equipment. It trades at 37x with 55% and 35% earnings growth in the next two years.

TOP PICK

Makes equipment for the chip industry. Recall the dartboard chart described at the top of today's show of the automation/robotics ecosystem. In the hardware space, just outside the manufacturers. Testing equipment for semiconductors, wireless, storage devices. Ensures quality and reliability of high-tech products. About 20% runway to $150. Yield is 0.4%.

What's also very cool is that, yes, it's in automation. But it's also gotten into robotics to the tune of about 25% CAGR growth rate consistently for the last 2 years, compared to 20% for peers. Definitely a leader, great company.

(Analysts’ price target is $144.75)

PARTIAL SELL

He just sold a third of his holding. His target is $135. Take profits.

BUY

Is up 53% in Q3, and one of the top S&P stocks in Q3. Very well-run. They make testing equipment in semis.

PAST TOP PICK

(A Top Pick Oct 28/24, Up 28%)

Last October, he said one of the themes to watch for 2025 was robotics. Its robotics accounts for only ~11% of revenues. Pricey. He's been writing some calls. 12-month price target of $150. Don't buy here, but over the next 6 months you can look to pick it up between $135-140.

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