Don't Overlook Teradyne (TER) International Revenue Trends While Assessing the Stock

Zacks Equity Research

Tue, May 13, 2025, 7:16 AM 4 min read

Did you analyze how Teradyne (TER) fared in its international operations for the quarter ending March 2025? Given the widespread global presence of this maker of wireless products, data storage and equipment to test semiconductors, scrutinizing the trends in international revenues becomes imperative to assess its financial strength and future growth possibilities.

In today's increasingly interconnected global economy, a company's ability to tap into international markets can be a pivotal factor in shaping its overall financial health and growth trajectory. For investors, understanding a company's reliance on overseas markets has become increasingly crucial, as it offers insights into the company's sustainability of earnings, ability to tap into diverse economic cycles and overall growth potential.

Being present in international markets serves as a counterbalance to domestic economic challenges while offering chances to engage with more rapidly evolving economies. However, this kind of diversification introduces challenges like currency fluctuations, geopolitical uncertainties and varying market trends.

Upon examining TER's recent quarterly performance, we noticed several interesting patterns in the revenue generated from its international segments, which are commonly analyzed and observed by Wall Street experts.

The company's total revenue for the quarter stood at $685.68 million, increasing 14.3% year over year. Now, let's delve into TER's international revenue breakdown to gain insights into the significance of its operations beyond home turf.

Unveiling Trends in TER's International Revenues

Asia Pacific accounted for 77.65% of the company's total revenue during the quarter, translating to $532.41 million. Revenues from this region represented a surprise of +12.77%, with Wall Street analysts collectively expecting $472.14 million. When compared to the preceding quarter and the same quarter in the previous year, Asia Pacific contributed $557.32 million (74.03%) and $423.67 million (70.63%) to the total revenue, respectively.

Europe, Middle East and Africa generated $43.36 million in revenues for the company in the last quarter, constituting 6.32% of the total. This represented a surprise of -45.09% compared to the $78.96 million projected by Wall Street analysts. Comparatively, in the previous quarter, Europe, Middle East and Africa accounted for $65.57 million (8.71%), and in the year-ago quarter, it contributed $67.49 million (11.25%) to the total revenue.

International Market Revenue Projections

Wall Street analysts expect Teradyne to report a total revenue of $646.18 million in the current fiscal quarter, which suggests a decline of 11.5% from the prior-year quarter. Revenue shares from Asia Pacific and Europe, Middle East and Africa are predicted to be 78.6% and 8.8%, corresponding to amounts of $507.83 million and $57.12 million, respectively.

For the full year, a total revenue of $2.92 billion is expected for the company, reflecting an increase of 3.5% from the year before. The revenues from Asia Pacific and Europe, Middle East and Africa are expected to make up 76.5% and 9.9% of this total, corresponding to $2.23 billion and $288.79 million respectively.

In Conclusion

Teradyne's reliance on international markets for revenues offers both opportunities and risks. Hence, keeping an eye on its international revenue trends could significantly help forecast the company's prospects.

In an era of growing international interdependencies and escalating geopolitical disputes, Wall Street analysts are vigilant in tracking these trends for businesses with a global reach, in order to refine their predictions of earnings. It should be noted, however, that a multitude of other elements, such as a company's domestic position, also play a significant role in shaping the earnings forecasts.

At Zacks, we place significant importance on a company's evolving earnings outlook. This is based on empirical evidence demonstrating its strong influence on a stock's short -term price movements. Invariably, there exists a positive relationship -- an upward revision in earnings estimates is typically mirrored by a rise in the stock price.

The Zacks Rank, our proprietary stock rating mechanism, demonstrates a notable performance history confirmed through external audits. It effectively utilizes the power of earnings estimate revisions to act as a predictor of a stock's price performance in the near term.

Teradyne, bearing a Zacks Rank #3 (Hold), is expected to mirror the broader market's movements in the near term. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Teradyne's Recent Stock Market Performance

Over the preceding four weeks, the stock's value has appreciated by 12.5%, against an upturn of 9.1% in the Zacks S&P 500 composite. In parallel, the Zacks Computer and Technology sector, which counts Teradyne among its entities, has appreciated by 11.9%. Over the past three months, the company's shares have seen a decline of 26.7% versus the S&P 500's 3.1% decline. The sector overall has witnessed a decline of 6.8% over the same period.

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This article originally published on Zacks Investment Research (zacks.com).

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