Value
8.3/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 9.7 |
| P/S | 9.2 |
| EV/EBITDA | 7.0 |
| Fwd P/E | 9.2 |
| PEG | 10.0 |
| Analyst target | 5.0 |
- ▸Forward P/E: 10.6x
- ▸PEG: 0.02
- ▸Attractively valued
TDC · Why this verdict
Why Teradata (TDC) is rated BUY WAIT
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictBUY WAIT
Overall score6.0/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Teradata has beaten earnings estimates in all four of the last four quarters with an average positive surprise of 184%, earns exceptional return on equity of 118% with 25% net margins and a Piotroski financial health score of 7 out of 9 — but 19% short interest, a high put-to-call ratio of 2.50, and a stock price already above the analyst target limit near-term entry.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Teradata generates a return on equity of 118% — placing it in the top percentile of peers on capital efficiency — alongside 25% net margins and a strong Piotroski financial health score of 7 out of 9, demonstrating a high-quality business delivering significant shareholder value. Quality breakdown | Return on equity stays above 80% and net margins remain above 20% over the next four reported quarters. | →Stable |
| CounterExtremely high return on equity can sometimes reflect a leveraged capital structure rather than pure business quality; the single-source component supplier concentration risk flagged in the 10-K annual filing could disrupt operations and compress margins. | ||
Teradata beat consensus earnings estimates in all four of the last four quarters, with an average positive surprise of 184% — driven in part by a 653% beat in the most recent May 2026 quarter — signaling that the company is consistently delivering results far above analyst expectations. Earnings | Earnings surprise stays above 10% in at least 3 of the next 4 quarters, sustaining the strong beat pattern. | →Stable |
| CounterThe 653% beat in the most recent quarter may reflect a non-recurring item that dramatically inflated the average; stripping the outlier the underlying beat average is more modest at roughly 28%, which is still strong but less exceptional. | ||
Short interest stands at 19% of the float with a short squeeze setup identified in the risk notes — meaning a significant portion of the float is bet against the stock, creating potential for a sharp upward price move if positive news catalyzes covering. Risk breakdown | Short interest falls below 12% within 6 months as continued earnings beats reduce the bear thesis viability. | ↑Improving |
| CounterHigh short interest is often justified by fundamental concerns; in Teradata's case, the 19% short interest may reflect well-informed views on competitive threats in the data warehousing market from cloud-native competitors. | ||
At $33.62, the stock is trading above the take-profit resistance level of $36.12 on a near-term basis, with the price-to-analyst-target upside measured at only 7.4% — the risk-to-reward ratio of 1.79 suggests limited room for new entry without a pullback. Targets | Price pulls back to the entry target of $32.10 or lower, creating a risk-to-reward ratio greater than 2.0 for new buyers. | ↓Deteriorating |
| CounterStrong earnings beats and improving news sentiment could attract buyers despite the limited analyst-target upside; a target upgrade from even one analyst would reset the upside calculation. | ||
Teradata generates a return on equity of 118% — placing it in the top percentile of peers on capital efficiency — alongside 25% net margins and a strong Piotroski financial health score of 7 out of 9, demonstrating a high-quality business delivering significant shareholder value.
→StableQuality breakdown
- Expectation
- Return on equity stays above 80% and net margins remain above 20% over the next four reported quarters.
CounterExtremely high return on equity can sometimes reflect a leveraged capital structure rather than pure business quality; the single-source component supplier concentration risk flagged in the 10-K annual filing could disrupt operations and compress margins.
Teradata beat consensus earnings estimates in all four of the last four quarters, with an average positive surprise of 184% — driven in part by a 653% beat in the most recent May 2026 quarter — signaling that the company is consistently delivering results far above analyst expectations.
→StableEarnings
- Expectation
- Earnings surprise stays above 10% in at least 3 of the next 4 quarters, sustaining the strong beat pattern.
CounterThe 653% beat in the most recent quarter may reflect a non-recurring item that dramatically inflated the average; stripping the outlier the underlying beat average is more modest at roughly 28%, which is still strong but less exceptional.
Short interest stands at 19% of the float with a short squeeze setup identified in the risk notes — meaning a significant portion of the float is bet against the stock, creating potential for a sharp upward price move if positive news catalyzes covering.
↑ImprovingRisk breakdown
- Expectation
- Short interest falls below 12% within 6 months as continued earnings beats reduce the bear thesis viability.
CounterHigh short interest is often justified by fundamental concerns; in Teradata's case, the 19% short interest may reflect well-informed views on competitive threats in the data warehousing market from cloud-native competitors.
At $33.62, the stock is trading above the take-profit resistance level of $36.12 on a near-term basis, with the price-to-analyst-target upside measured at only 7.4% — the risk-to-reward ratio of 1.79 suggests limited room for new entry without a pullback.
↓DeterioratingTargets
- Expectation
- Price pulls back to the entry target of $32.10 or lower, creating a risk-to-reward ratio greater than 2.0 for new buyers.
CounterStrong earnings beats and improving news sentiment could attract buyers despite the limited analyst-target upside; a target upgrade from even one analyst would reset the upside calculation.
Per-dimension breakdown
Quality
7.4/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 5.0 |
| Gross margin | 8.1 |
| Op margin | 7.7 |
| Net margin | 10.0 |
| Current ratio | 4.9 |
| FCF quality | 6.0 |
| Moat | 6.9 |
| Piotroski F | 7.8 |
- ▸Excellent ROE: 118%
- ▸Strong margins: 25%
- ▸Earnings quality warning: 80% FCF/NI
- ▸Strong Piotroski F-Score: 7/9
Growth
4.0/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 4.0 |
Momentum
4.2/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 8.0 |
| MACD | 2.2 |
| OBV | 1.0 |
| MA position | 4.0 |
| Volume | 6.0 |
- ▸Uptrend pullback (RSI 35) - buy opportunity
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
5.7/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 7.3 |
| erm sentiment | 5.0 |
Insider
5.5/10data confidence 100%| Component | Sub-score |
|---|---|
| materiality | 3.0 |
| insider conviction | 2.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸Notable insider selling — $3,069,794 (0.107% of mkt cap)
- ▸Institutions accumulating
Peer rank
5.8/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 8.6 |
| quality rank | 9.2 |
| growth rank | 2.1 |
- ▸Attractive P/E vs peers
- ▸Superior ROE vs peers
Technical
5.7/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 6.0 |
| support resistance | 6.4 |
| 52w position | 4.6 |
Risk (lower is worse)
5.6/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 10.0 |
| days to cover | 6.0 |
| volatility | 0.0 |
| put call | 9.5 |
| implied vol | 0.0 |
| max pain risk | 5.0 |
| beta | 9.5 |
| debt equity | 5.0 |
- ▸Short squeeze setup: 26% short, quality 7.5
- ▸High IV: 90%
- ▸Concentration risks: 1 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
7.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
- ▸Perfect beat streak: 4Q
- ▸Earnings in 5 days
How the verdict was assembled
Engine trigger
Fundamentals strong but target reached (1.1% upside).
Engine technical detail
verdict_path:
L4:PATH_A_DEEP_VALUE|V8:TARGET_REACHEDPassed (4)
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (3)
- MOMENTUM:4.2<4.5
- ASYMMETRY:0.1<1.5@spot
- EARNINGS_PROXIMITY:5d<=7d
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
0.08
Upside
+1.1%
Downside
12.9%
Sizing output
STARTER
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $2.9B<$5B
Investment implication
The STRONG_BUY_WAIT verdict reflects the MOMENTUM gate's 4.2<4.5 outcome against Value at 8.3 and asymmetric R:R of 0.08.
The strongest dimensions are Value at 8.3, Catalyst at 7.5, and Quality at 7.4; the weakest are Growth at 4.0, Momentum at 4.2, and Insider at 5.5. The V9 engine flagged 3 failed gates with 1 warning, producing an asymmetric reward-to-risk of 0.08 and an engine sizing output of STARTER.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Exceptional Return On Equity
Trip ifReturn on equity drops below 50%, more than 68 percentage points below the current 118%, indicating significant capital efficiency deterioration.
- P2Massive Earnings Beat Streak
Trip ifEarnings surprise falls below 0% in at least 3 of the next 4 quarters, ending the beat streak.
- P3High Short Interest Squeeze Risk
Trip ifShort interest rises above 25% of the float, more than 6 percentage points above the current 19%, indicating increased bearish conviction.
- P4Price Above Analyst Target
Trip ifStock price rises above $40, more than 19% above the current $33.62, without a corresponding analyst target increase above $44.