Summary:
Teradata reported modest fourth quarter 2014 results. While earnings beat the Zacks Consensus Estimate, revenues lagged the estimates. We believe that new customer wins, expanding relationship with large vendors, improved traction from sales force expansion, new products, market share gains, growing database analytics market and acquisitions will benefit the company in the long run. However, Teradata has provided a soft outlook for 2015 due to expected currency headwinds. In addition, increased investment in sales, a sluggish spending environment in the domestic market and intensifying competition from peers are likely to weigh down on results. Thus, we have a Neutral recommendation on Teradata and set a target price of $44.00.
Overview:
Founded in 1979 and headquartered in Dayton, Ohio, Teradata Corporation (TDC) is a leading provider of Enterprise Data Warehousing (EDW) solutions, including enterprise analytic technologies and services worldwide. The EDW offering is built on Massively Parallel Processing (MPP) architecture. The company was spun off from NCR Corporation in Aug 2007 and now operates as a standalone entity.
Teradata provides analytic data solutions, which include integrated data warehousing, big data analytics and business applications. The company's data warehousing solutions comprise software, hardware, and related business consulting and support services. The company earned revenues of $2.69 billion.
Teradata recognizes its revenues in two operating segments: Product revenues (revenues of $1.23 billion) and Services revenues (revenues of $1.46 billion). The company offers its products in two geographic regions the North American and Latin American (Americas) region, and the International region comprising Europe, Middle East, Africa, Asia-Pacific and Japan.
Teradata has strategic partnerships with large system integrators such as Accenture, Capgemini, Cognizant, Wipro Limited and IBM Global Business Services. The company competes with large players such as Oracle, IBM, Microsoft, SAP and Dell to name a few.
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