Critical Analysis: Teradata (TDC) versus Its Competitors

Teradata (NYSE:TDC) is one of 954 public companies in the “Software” industry, but how does it compare to its peers? We will compare Teradata to similar businesses based on the strength of its analyst recommendations, profitability, valuation, institutional ownership, earnings, risk and dividends.

Analyst Ratings

This is a summary of recent ratings for Teradata and its peers, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Teradata	1	6	3	0	2.20
Teradata Competitors	5715	21424	44682	1492	2.57

Teradata currently has a consensus target price of $34.78, suggesting a potential upside of 1.87%. As a group, “Software” companies have a potential upside of 27.71%. Given Teradata’s peers stronger consensus rating and higher probable upside, analysts plainly believe Teradata has less favorable growth aspects than its peers.

Volatility & Risk

Teradata has a beta of 0.61, suggesting that its stock price is 39% less volatile than the S&P 500. Comparatively, Teradata’s peers have a beta of 1.34, suggesting that their average stock price is 34% more volatile than the S&P 500.

Profitability

This table compares Teradata and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Teradata	27.08%	47.25%	10.29%
Teradata Competitors	-612.30%	20.88%	-8.99%

Earnings & Valuation

This table compares Teradata and its peers revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Teradata	$1.66 billion	$130.00 million	7.19
Teradata Competitors	$1.81 billion	$385.92 million	111.24

Teradata’s peers have higher revenue and earnings than Teradata. Teradata is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Institutional and Insider Ownership

90.3% of Teradata shares are owned by institutional investors. Comparatively, 41.9% of shares of all “Software” companies are owned by institutional investors. 1.0% of Teradata shares are owned by company insiders. Comparatively, 19.8% of shares of all “Software” companies are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

Teradata peers beat Teradata on 9 of the 13 factors compared.

Teradata Company Profile

Teradata Corporation, together with its subsidiaries, provides a connected multi-cloud data platform for enterprise analytics. The company offers Teradata Vantage, an open and connected platform designed to leverage data across an enterprise. Its business consulting services include support services for organizations to establish a data and analytic vision, enable a multi-cloud ecosystem architecture, and identify and operationalize analytical opportunities, as well as to ensure the analytical infrastructure delivers value. The company offers support and maintenance services. It serves clients in financial services, government, healthcare and life sciences, manufacturing, retail, telecommunications, and travel/transportation sectors through a direct sales force in the Americas, Europe, the Middle East, Africa, the Asia Pacific, and Japan. Teradata Corporation was incorporated in 1979 and is headquartered in San Diego, California.