Value
7.8/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 9.6 |
| P/S | 9.0 |
| EV/EBITDA | 6.9 |
| Fwd P/E | 9.0 |
| PEG | 10.0 |
| Analyst target | 3.0 |
- ▸Forward P/E: 11.8x
- ▸PEG: 0.03
- ▸Attractively valued
TDC · Why this verdict
Why Teradata (TDC) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
Show full disclosure ▾Hide full disclosure ▴
About TrendMatrix. TrendMatrix is a publisher of general securities research and market commentary. We publish on a regular schedule. All content is the same for every subscriber in a tier — we do not provide personalized investment advice and we do not take into account any individual subscriber's financial situation, investment objectives, risk tolerance, tax situation, or holdings.
Not investment advice. TrendMatrix is not a registered investment adviser. Our content is for informational and educational purposes only. Consult your own licensed investment adviser, broker, or tax professional before making any investment decision.
Conflicts and positions. People who build TrendMatrix, or entities they control, may hold positions, long or short, in securities it covers, and may trade them at any time. Positions are not disclosed individually. Verdicts are generated by an automated model applied by the same rules to every covered stock, and are not adjusted for any position held by the people who build TrendMatrix. We do not accept payment from issuers for coverage.
No paid promotion. TrendMatrix does not accept payment from any issuer, broker, or third party in exchange for coverage of any security.
No fiduciary duty. No fiduciary, advisory, or agency relationship is created between you and TrendMatrix by reading our content or subscribing to our service.
Performance. Past performance is not indicative of future results. Performance figures reflect the published model only and do not reflect any individual subscriber's actual results.
VerdictSELL
Overall score5.6/10
ConfidenceMEDIUM
MacroRISK_OFF
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. | ↓Deteriorating |
| 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. | →Stable |
| 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.
↓DeterioratingRisk 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.
→StableTargets
- 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
7.3/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 6.2 |
| Gross margin | 8.3 |
| Op margin | 4.8 |
| Net margin | 10.0 |
| Current ratio | 3.7 |
| FCF quality | 5.7 |
| Moat | 7.9 |
| Piotroski F | 8.9 |
- ▸Excellent ROE: 119%
- ▸Strong margins: 27%
- ▸Earnings quality warning: 76% FCF/NI
- ▸Wide economic moat
Growth
2.6/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 2.6 |
Momentum
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.3 |
| MACD | 10.0 |
| OBV | 1.0 |
| MA position | 9.0 |
| Volume | 1.5 |
- ▸Overbought (RSI 74)
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
5.5/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 7.0 |
| Analyst rating | 5.0 |
| Price target | 4.6 |
- ▸LLM news sentiment: +0.40 (n=1)
Insider
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| materiality | 4.5 |
| insider conviction | 2.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸Modest insider selling — $1,742,480 (0.055% of mkt cap)
- ▸Institutions accumulating
Peer rank
6.1/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 8.4 |
| quality rank | 9.4 |
| growth rank | 0.7 |
- ▸Attractive P/E vs peers
- ▸Superior ROE vs peers
Technical
3.2/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.6 |
| support resistance | 1.5 |
| 52w position | 6.4 |
Risk (lower is worse)
4.6/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 9.3 |
| days to cover | 1.0 |
| volatility | 4.6 |
| put call | 0.0 |
| implied vol | 0.1 |
| max pain risk | 3.0 |
| beta | 9.3 |
| debt equity | 9.3 |
- ▸Short squeeze setup: 23% short, quality 7.5
- ▸Elevated put/call: 2.93
- ▸High IV: 79%
- ▸Above max pain $20
Catalyst
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 4.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| news activity | 5.0 |
- ▸Perfect beat streak: 4Q
- ▸Earnings in 7 days
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (4)
- MOMENTUM:5.2>=4.5
- INSIDER:OK
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- ASYMMETRY:-1.0=NEGATIVE
- EARNINGS_PROXIMITY:7d<=7d
Warning (2)
- MOMENTUM:5.2<5.5 (soft — BUY_NOW allowed but watch)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-1.01
Upside
-15.1%
Downside
15.0%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $3.2B<$5B
Investment implication
The F-path SELL output reflects an overall score of 5.0 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Value at 7.8) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-1.0=NEGATIVE, EARNINGS_PROXIMITY:7d<=7d) reinforce the read. Current asymmetry R:R is -1.01 — supplementary context, not the trigger for this path.
The strongest dimensions are Value at 7.8, Quality at 7.3, and Catalyst at 6.8; the weakest are Growth at 2.6, Technical at 3.2, and Risk (lower is worse) at 4.6. The V9 engine flagged 2 failed gates with 2 warnings, producing an asymmetric reward-to-risk of -1.01 and an engine sizing output of AVOID.
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.