- Stock Soars on Earnings Beat: Teradata (NYSE: TDC) shares jumped roughly 19% to about $24.64 on November 5, 2025 after a strong Q3 earnings report [1]. The one-day surge pushed the stock above key technical levels, marking a bullish breakout above its 200-day moving average around $22.72 [2].
- Q3 2025 Beat on Revenue & Profit:Quarterly revenue was $416 million (down ~5% year-over-year but topping analyst estimates of ~$406M) and adjusted EPS came in at $0.72 (crushing the $0.53 consensus) [3] [4]. Teradata’s public cloud Annual Recurring Revenue (ARR) grew 11% year-over-year, helping drive the beat, and cost efficiencies boosted operating margins [5] [6].
- Cloud-First, AI-Driven Strategy: The company is pivoting from its legacy data-warehouse roots to a cloud analytics and AI platform model. In the past week, Teradata appointed Josh Fecteau as Chief Data & AI Officer to spearhead its enterprise AI strategy [7] and launched new AI Services designed to turn AI pilot projects into production-ready “agentic” AI solutions [8]. It also unveiled an AgentBuilder toolset to help organizations rapidly deploy autonomous AI agents on its Vantage cloud platform [9].
- Solid Financials & Outlook: Teradata generated strong free cash flow ($88M in Q3) and delivered GAAP EPS of $0.42 (non-GAAP $0.72) – up from $0.33 a year ago [10] [11]. Management reiterated its full-year 2025 guidance, projecting flat-to-2% Total ARR growth and 14–18% Cloud ARR growth, and maintained non-GAAP EPS guidance of ~$2.40 for 2025 [12] [13]. Executives expressed confidence that Teradata’s “knowledge platform is ideal for today’s AI workloads” and affirmed the company is on track with its turnaround plan [14] [15].
- Analyst Sentiment Mixed: Wall Street’s consensus on TDC is “Hold”, reflecting cautious optimism. Before the earnings pop, the median 12-month price target was ~$24 (about 10% above the pre-rally price) [16]. Notably, Evercore ISI just raised its target to $28 (from $25) and reiterated an Outperform rating, suggesting the stock remains undervalued at current levels [17]. At ~$24–$26, Teradata trades around 9x forward earnings and just ~1.2x sales – a modest valuation relative to peers [18] [19]. The company carries no dividend, choosing instead to buy back shares (about $30M repurchased in Q3) and invest in growth.
- 52-Week Range & Momentum: Even after the recent spike, TDC stock (market cap ~$2.0 billion) sits well below its 52-week high of $33.20 [20]. It had languished near a low of $18.43 in prior weeks [21] amid broader tech weakness. The Q3 rally, however, has swung momentum positive – the stock is now up roughly 20% year-to-date, having erased a steep year-long decline. Technical indicators turned bullish with the 50-day and 200-day moving averages converging; the recent breakout on heavy volume points to improving investor sentiment.
Current Stock Price & Recent Performance (Nov 5, 2025)
As of November 5, 2025, Teradata’s stock trades in the mid-$20s after a sharp post-earnings rally. The latest trade was around $24.64, up ~19% in a single session [22]. This big jump followed the company’s Q3 earnings announcement and reflects renewed investor confidence. Prior to the earnings, TDC was hovering near $20, meaning the stock has swiftly regained lost ground.
This surge also carries technical significance. On Nov 5, Teradata broke above its 200-day moving average (~$22.72), hitting intraday highs around $26.39 [23]. Crossing above the 200-day average is seen as a bullish signal – in fact, TDC’s one-day gain of about 26% at the high made it one of the market’s top performers that day [24]. For context, Teradata’s 52-week range spans from a low of $18.43 to a high of $33.20 [25]. Even after the recent run-up, the stock remains roughly 25% below its year-ago high, suggesting room for recovery if the company can sustain positive momentum. Year-to-date, the stock’s performance has flipped to positive territory, outperforming many peers in the data analytics sector in the wake of its earnings beat.
In the weeks leading up to this, Teradata’s shares had been under pressure, reflecting broader market volatility and investor caution toward enterprise tech providers. The company’s revenue had been declining modestly year-over-year, and TDC stock had lost nearly 30% over the past 12 months [26]. However, the strong Q3 results and upbeat outlook (discussed below) have catalyzed a reversal. Trading volume spiked on Nov 5 – nearly 900,000 shares, well above the typical ~0.9 million three-month average [27] – indicating heavy buying interest. In short, Teradata’s stock price has swiftly rebounded on a combination of earnings strength and excitement around its future prospects.
Latest News & Recent Developments 📰
In just the past several days, Teradata has made headlines on multiple fronts. The catalyst was the Q3 2025 earnings report (released Nov 4), which not only beat Wall Street expectations but also came with reaffirmed guidance. The earnings call on November 4 delivered some positive surprises: revenue and recurring revenue both exceeded the company’s guidance range, and earnings topped forecasts [28]. Teradata’s CEO Steve McMillan highlighted “another quarter of solid execution” and noted that non-GAAP EPS and free cash flow were ahead of expectations, underscoring management’s confidence in the ongoing turnaround [29]. This news sent the stock soaring the next day, capturing investors’ attention.
Beyond the financials, Teradata has unveiled notable strategic developments aimed at strengthening its position in artificial intelligence (AI) and cloud analytics:
- New AI Leadership: On November 3, 2025, Teradata announced the appointment of Josh Fecteau as its Chief Data and AI Officer (CDAO) [30]. In this newly created C-suite role, Fecteau is charged with leading the company’s enterprise-wide data and AI strategy. He’s a Teradata veteran (with prior stints at EMC and consulting) and will head an initiative dubbed “Teradata on Teradata,” focused on showcasing the company’s own technology to build AI-driven solutions [31]. This move signals Teradata’s commitment to infuse AI into its corporate DNA and aligns with the industry trend of leveraging internal data expertise for product innovation.
- AI Services Launch: Around the end of October, Teradata rolled out “Teradata AI Services,” a new consulting and solutions offering to help businesses convert AI proof-of-concepts into production-ready, autonomous AI use cases [32] [33]. These services pair Teradata’s data platform with embedded AI experts to guide enterprises in scaling up AI “agents” across various functions. The program is meant to tackle a common pain point: while companies experiment heavily with AI, an estimated 95% of enterprise AI pilots fail to reach production-scale impact [34]. Teradata aims to fix that by providing expertise in prioritizing high-value AI projects, ensuring robust governance, and rapidly deploying AI solutions that deliver measurable business value [35] [36]. Teradata’s COO Michael Hutchinson commented that businesses “need expert guidance on how to use AI effectively — not just acquire it,” emphasizing that the service focuses on monetizing AI investments with real outcomes [37]. The AI Services offering is available now globally and supports hybrid cloud or on-prem deployments, reflecting Teradata’s strategy of meeting customers wherever their data lives [38].
- AgentBuilder Tool: In early October, Teradata also unveiled a new product called AgentBuilder, a suite of capabilities for developing autonomous, contextually intelligent AI agents [39]. AgentBuilder, which enters private preview in Q4 2025, lets teams design and manage multi-agent AI systems that leverage Teradata’s Vantage platform for data and analytics. It includes ready-made “Teradata Agents” (templates for tasks like churn analysis or system monitoring) so enterprises can quickly deploy AI agents infused with domain-specific knowledge [40] [41]. According to Teradata’s Chief Product Officer Sumeet Arora, “AgentBuilder represents meaningful progress in advancing agentic AI for the autonomous enterprise”, combining open-source AI frameworks with Teradata’s proprietary AI and data tools [42]. This development targets the growing interest in generative AI agents while addressing enterprise concerns around data silos, hallucinations, and governance in AI deployments [43].
- Legal Win: On the legal front, Teradata scored a notable victory in late September 2025 by winning dismissal of an investor lawsuit. The suit had alleged that Teradata misled shareholders about challenges in its cloud transition and ARR growth. A U.S. judge threw out the case, finding insufficient evidence that Teradata’s statements about deal scrutiny and economic trends were false or misleading [44]. This resolution removes an overhang of litigation risk related to Teradata’s past cloud communication. Additionally, an older high-profile legal battle with SAP (over alleged IP theft related to Teradata’s database) appears to have wound down, with the U.S. Supreme Court declining to hear SAP’s appeal of an antitrust ruling in Teradata’s favor [45]. In short, Teradata’s recent news cycle includes positive developments operationally and legally, painting a picture of a company clearing hurdles as it pivots to the future.
In summary, the past week has been eventful for Teradata: a strong earnings beat and stock surge, new AI-focused leadership and product offerings, and even closure to a legal dispute. These developments collectively underscore management’s strategic focus on cloud and AI initiatives as the key to reviving growth and improving market sentiment around Teradata.
Business Model, Leadership & Strategic Direction 🏢
What does Teradata do? Teradata Corporation is an enterprise software firm that provides a connected hybrid-cloud data analytics platform for large organizations globally [46]. In simpler terms, Teradata helps businesses consolidate their massive data sets and run advanced analytics (from SQL queries to machine learning and AI) across both on-premises systems and multiple cloud environments. The company’s flagship product is Teradata Vantage, a high-performance analytic database platform that can be deployed on public clouds (like AWS, Azure, Google Cloud) or in hybrid setups. Teradata augments this platform with software tools (e.g. analytics functions, data pipelines) and professional services (consulting, support, managed services) to ensure customers can derive actionable insights from their data. Historically, Teradata was known for its proprietary on-prem data warehousing appliances, but over the last several years it has aggressively transformed into a cloud-first, software-as-a-service (SaaS) oriented business with subscription-based pricing (Annual Recurring Revenue is a key metric) [47].
Business Model: Today, the bulk of Teradata’s revenue comes from recurring subscriptions to its software platform, either delivered as cloud subscriptions or as on-prem licenses under a subscription model. In Q3 2025, for example, 88% of total revenue was recurring (subscription or maintenance) [48]. The company has been intentionally shifting customers from one-time perpetual licenses to recurring contracts, and especially encouraging migration to its cloud offerings. This transition has put near-term pressure on revenue growth (as seen by slight declines in reported revenue), but it improves the quality of earnings and visibility of future cash flows. Teradata also generates revenue from consulting and support services, which not only add high-margin income but also help embed Teradata’s technology deeply into customers’ operations.
Teradata’s leadership team is helmed by CEO Steve McMillan, who took charge in 2020 to drive the cloud transition. McMillan has emphasized making Teradata a “cloud and AI powerhouse” built on its decades of data management expertise [49]. Under his leadership, Teradata has invested in cloud integration, revamped its product as VantageCloud (with multi-cloud capability), and introduced ClearScape Analytics (an in-database AI/ML toolkit) to stay competitive in the AI era. The addition of Chief Data & AI Officer Josh Fecteau in 2025 further bolsters the leadership ranks with AI-focused talent [50]. Other key executives include CFO Claire Bramley, COO Michael Hutchinson (quoted earlier regarding AI Services [51]), and Chief Product Officer Sumeet Arora, each playing roles in execution of the strategy. The board is led by independent Chairman Michael Gianoni, and it includes technology industry veterans who are guiding Teradata’s transformation (e.g., former Oracle and tech executives as independent directors).
Strategic Direction: Teradata’s strategy centers on helping enterprises leverage AI and analytics at scale, across hybrid cloud environments. The company is positioning itself not just as a database provider, but as an end-to-end data analytics platform for AI. This involves:
- Cloud Innovation: Expanding its VantageCloud offerings (which include VantageCloud Lake for scalable storage/analytics and VantageCloud Enterprise for mission-critical workloads) and ensuring compatibility with all major public clouds. Teradata has forged partnerships with cloud vendors and emphasizes that its platform can “run those [analytics and AI] workloads where customers choose – the cloud or on-prem, or both” [52]. This hybrid flexibility is a differentiator for customers who demand cloud agility and on-prem control for sensitive data.
- AI/ML Integration: Building AI capabilities into its platform (e.g., in-database machine learning, support for popular AI languages/frameworks) so that clients can train models and deploy AI solutions directly on their data in Teradata. The recent AgentBuilder and AI services are part of this push – enabling “agentic AI” and offering expert help to accelerate AI adoption. By framing its database as a “knowledge platform ideal for today’s AI workloads” [53], Teradata aims to ride the wave of AI investment among enterprises.
- Subscription Revenue & Cloud ARR Growth: Financially, Teradata’s goal is to stabilize and then reignite revenue growth through increasing ARR (Annual Recurring Revenue). Cloud ARR (from customers using Teradata in cloud deployments) is the growth engine – it rose 11% YoY in Q3 to $633M [54]. While total ARR was flat (as legacy on-prem ARR declines offset cloud gains) [55], the company expects cloud ARR to keep climbing (14–18% growth targeted for FY25) [56], eventually overtaking the declines in older streams. This is essentially a race to transition the customer base to modern cloud subscriptions before overall revenues shrink too much. So far, Teradata’s largest customers (often Fortune 500 firms in finance, retail, telecom, etc.) have been gradually migrating to Teradata’s cloud offerings, and the company often highlights big wins or expansions in its earnings calls.
- Profitability and Cash Flow Focus: Unlike many high-growth cloud companies, Teradata has been profitable and generates solid cash flow, which is a strategic choice to differentiate it as a stable player. The company is disciplined in cost management – evidenced by improving operating margins (non-GAAP operating margin was 23.6% in Q3, up from 22.5% a year prior [57]). Teradata has also used its cash to repurchase shares (reducing share count and supporting the stock). Balancing growth investments in cloud/AI with profit is a key strategic focus espoused by CFO Claire Bramley.
In summary, Teradata’s business model is evolving from a pure data warehouse hardware-era company into a cloud-based analytics and AI platform provider. Leadership is actively driving this transformation, betting on hybrid cloud flexibility and integrated AI capabilities as Teradata’s competitive edge. The strategic direction is clear – retain Teradata’s traditional strength (handling massive, complex data workloads reliably) while modernizing the delivery (cloud) and the value proposition (AI-driven insights). It’s a challenging balancing act, but one that management believes will return Teradata to sustainable growth.
Financial Performance and Earnings Insights 💰
Teradata’s latest financial results (Q3 2025) offer a mixed but generally positive picture: soft topline trends, but strong profitability and execution against guidance. Here are the key takeaways from the financial performance:
- Q3 2025 Results: Teradata reported $416 million in revenue for the quarter, which was a 5% decline from the $440M in the year-ago period [58]. Despite the drop, this sales number beat analyst expectations of roughly $406M [59]. The revenue dip reflects ongoing headwinds from legacy product declines and currency effects (constant-currency revenue was down ~6% [60]). Recurring revenue (subscriptions and maintenance) was $366M, down 2%, comprising 88% of total revenue [61] – highlighting the near-total shift to recurring sales. On the profit side, results were better than expected. GAAP net income was $40 million (EPS $0.42), up from $0.33 EPS in Q3 2024 [62]. On an adjusted basis, EPS was $0.72, which not only grew from $0.69 last year but trounced the $0.53 consensus estimate by ~35% [63]. This sizable earnings beat was driven by a combination of higher-than-modeled revenue and expanded margins. Teradata’s non-GAAP gross margin hit 62.3% (vs 61.6% a year ago) and non-GAAP operating margin reached 23.6% (vs 22.5%) [64] – indicating effective cost controls and a richer mix of recurring revenue [65]. In fact, Evercore ISI analysts noted Teradata’s 23.6% operating margin significantly outperformed expectations (18.4–19.7%) for the quarter [66], thanks in part to cost efficiency initiatives and restructuring actions earlier in the year [67].
- Cloud ARR & Backlog: A critical metric, Public Cloud ARR, grew 11% year-over-year to $633M [68]. While double-digit growth is a positive, Evercore commented this was “perhaps a little shy of investor expectations” for cloud uptake [69]. Management had telegraphed that Q3 cloud ARR growth would be lighter because some large deals closed in Q2 (pulled forward), and indeed that seems to have occurred [70]. Total ARR was $1.49 billion (flat year-over-year in constant currency) [71] [72]. Essentially, new cloud business is just offsetting declines in on-prem ARR for now. Teradata’s task is to accelerate cloud ARR growth further (into the mid-teens or higher) to return to overall revenue growth. The remaining performance obligations (backlog) and pipeline were not explicitly detailed in the press release, but the reiterated guidance (see below) implies confidence in deal flow for Q4.
- Cash Flow and Balance Sheet: Teradata continues to generate healthy cash. Operating cash flow was $94M in Q3 and Free Cash Flow (FCF) was $88M, up from $69M FCF a year ago [73]. Year-to-date, FCF is on track to meet the company’s full-year target of $260–$280 million [74]. This strong cash generation enables strategic flexibility. Teradata has been using cash to repurchase shares (improving EPS) – for example, it bought back about $30 million of stock in Q3 according to market reports [75]. The balance sheet shows ~$500M in cash (estimated) and about $567M in total debt [76] [77]. While debt-to-equity appears high (over 300% on a accounting basis) [78], this is partly due to low book equity from past buybacks. Importantly, the company’s 13% free cash flow yield and lack of dividend suggest it’s prioritizing reinvestment and buybacks over payouts [79] [80]. Teradata’s leverage is manageable given its cash flow and EBITDA generation, and it has been maintaining a solid Piotroski F-Score of 7 (a sign of financial strength) according to analysts [81].
- FY 2025 Outlook: Critically, Teradata maintained its full-year 2025 guidance and in some cases tightened it favorably. The company updated its EPS outlook upward: non-GAAP EPS is now expected at $2.38–$2.42 (narrowed from prior ~$2.20–$2.40 guidance) [82], which at the midpoint implies ~10% growth year-over-year and suggests a strong Q4 ahead. It reaffirmed Public Cloud ARR growth of +14% to +18% for 2025 [83] – though Evercore opined that actual growth may land at or just below the low end (~14%) given some customer hesitancy on cloud migrations [84]. Teradata also reiterated that total ARR will be flat to +2% in constant currency for FY25 [85], and that total revenue will decline 5% to 7% for the year (due to the subscription transition) [86]. Free cash flow guidance of $260–$280M was affirmed [87]. Additionally, Teradata issued Q4 guidance calling for a modest YoY revenue decline (-2% to -4% in constant currency) and Q4 non-GAAP EPS of $0.53–$0.57 [88], which brackets the current consensus (and notably is above the street’s $0.54 estimate at the midpoint [89]). The maintenance of guidance, despite a tough macro environment, was seen as a sign of stability – management basically conveyed that the business is performing as expected and prior targets are achievable.
In summary, Teradata’s financial performance highlights a company in transition but executing well. Revenues are still contracting slightly as old streams wane, but importantly Teradata is beating forecasts, preserving profits, and proving it can grow its cloud segment. The Q3 beat and strong cash flow underscore that the pivot to subscriptions and cloud is being managed without sacrificing the bottom line. Investors reacted positively because the results validated Teradata’s turnaround strategy – showing improving earnings quality and no surprises in the migration to cloud. Key areas to watch going forward will be whether cloud ARR growth can accelerate further and when overall revenue can inflect back to growth (likely once the cloud mix is large enough). For now, Teradata’s finances appear sound, with a balance of cost discipline and targeted growth investments keeping shareholders satisfied.
Analyst Commentary & Projections 📈
How are experts and market analysts reacting? The recent developments have drawn a range of views from analysts – generally acknowledging Teradata’s progress but remaining split on its long-term upside. Here are some highlights of what analysts and experts are saying:
- Consensus Rating – Caution Prevails: Teradata’s stock currently carries a consensus “Hold” rating from Wall Street, meaning analysts on average expect the stock to perform in line with the market. According to Refinitiv, the latest breakdown is 3 Buy ratings, 6 Hold, and 2 Sell [90]. This skew toward neutral/hold reflects that while Teradata’s execution has improved, some analysts are still cautious about the growth outlook. The average price target was around $24 (pre-earnings), roughly 10% above the stock’s price before the Q3 jump [91]. This implies limited upside in the eyes of many analysts at that time.
- Evercore ISI – Bullish Upside to $28: Notably, in the wake of the earnings beat, at least one firm has become more bullish. Evercore ISI raised its price target on Teradata to $28 (from $25) and reiterated an “Outperform” (buy) rating [92]. Evercore’s new target sits at the high end of peer estimates and suggests they see significant upside. The analysts highlighted that at around $20–$22 (pre-rally), Teradata was undervalued, citing a PEG ratio of just 0.23 – indicating the stock’s low P/E relative to its earnings growth trajectory [93]. In Evercore’s view, Teradata’s strong Q3 margins and earnings beat demonstrate that the business has more strength than the market was giving it credit for. They also noted Teradata’s impressive 13% free cash flow yield and aggressive share buybacks as signs of shareholder value creation [94] [95]. However, Evercore did temper expectations on the top line, predicting cloud ARR growth might come in at the low end of guidance (~14%) as customers take time to shift to cloud [96]. Overall, Evercore’s stance is that Teradata is on a solid path and the market will reward it, hence the above-consensus price target.
- Morgan Stanley/Barclays/Others – Skeptics Remain: On the more cautious side, some analysts remain unconvinced that Teradata’s turnaround can dramatically accelerate. For instance, earlier in the year Barclays had a Sell/Underweight rating and a target in the low $20s (Barclays’ Raimo Lenschow had a $22 target as of April) [97] [98]. The bearish arguments generally focus on competition and growth concerns: Teradata faces stiff competition from cloud-native data platforms, and its revenue has been essentially flat-to-down in recent years, which skeptics fear could continue. There’s also a concern that migrating existing Teradata customers to the cloud may not expand the customer base much – i.e. growth could be limited if new customer wins remain scarce. Some analysts also point out that Teradata’s recurring revenue was actually down year-over-year in Q3 (recurring sales -2% YoY [99]), which is unusual for a subscription business and flags that customer spending levels need to pick up. Until the company shows a clear return to overall revenue growth, these cautious analysts are advising investors to stay on the sidelines.
- Zacks & Yahoo Finance Commentary: A Zacks analysis characterized the Q3 report positively, noting Teradata “surpassed earnings and revenue estimates,” with surprises of +35.8% on EPS and +2.5% on revenue [100]. Zacks highlighted the strength in recurring revenue and cost management. However, they also mentioned that year-over-year sales were down, implying the company’s growth challenges haven’t vanished. Yahoo Finance, in an article titled “Why Teradata Stock Exploded Higher Today,” pointed out the dichotomy that “revenue is falling, but profitability is surging” [101]. This suggests that while investors cheered the earnings beat, some are mindful that a shrinking top line is not a sustainable trend long term. Yahoo (via The Motley Fool) also noted that heading into the report, expectations were modest (analysts had expected $0.54 EPS and $406M revenue [102]), and Teradata managed to clear that bar easily – which likely fueled the stock’s explosive gain.
- Simply Wall St – AI Narrative Analysis: Financial analysis site Simply Wall St commented on Teradata’s recent AI moves, observing that the company is trying to position itself at the forefront of enterprise AI innovation [103]. They note the dual initiatives of appointing a CDAO and launching AI services as reinforcing Teradata’s emphasis on data and AI strategy. However, the analysis struck a cautious tone, stating that these leadership changes and new offerings alone “are unlikely to materially impact the most important short-term catalyst: delivering a turnaround in recurring and cloud revenue while staving off competition from cloud-native platforms.” [104] In other words, while Teradata’s AI push is strategically sound, Simply Wall St suggests that investors should still keep an eye on whether the core business metrics (like recurring revenue growth) actually improve. They flagged persistent declines in recurring revenue and intense competition (from the likes of Snowflake, AWS, etc.) as ongoing risks [105]. This encapsulates a common refrain among analysts: Teradata’s AI story is promising, but execution in winning new customers and growing sales is the real key to unlocking stock upside.
- Price Target Range: Across the analyst community, price targets for TDC stock vary widely, reflecting different viewpoints on its prospects. The low end of targets is around $22 (implying skepticism and potential downside) and the high end is up to $35 (implying significant upside if the turnaround accelerates) [106] [107]. The average/median target sits in the mid-to-upper $20s at present, basically in line with the current trading price [108]. This indicates that after the recent rally, the stock has achieved what many analysts thought it could – so to move higher, Teradata will need to continue executing well and perhaps inspire some upgrades or higher targets. It’s worth noting that as of Nov 5, the stock (~$25) trades at about 9x next-year earnings, which some analysts (like Evercore) find cheap, while others see it as fair for a low-growth scenario [109]. The next few quarters of results – demonstrating whether Teradata can stabilize revenues and grow its cloud business – will likely be the catalyst for analysts to either warm up further or grow more cautious.
In summary, analyst commentary on Teradata is cautiously optimistic, acknowledging the better-than-expected earnings and the company’s aggressive pivot to AI, but also keeping in mind that sustained growth is not yet proven. Bulls (like Evercore) argue the stock is undervalued and that Teradata’s profitability and cash flow make it attractive, whereas bears worry about competition and an unproven growth story. Investors should watch for any analyst upgrades/downgrades following the Q3 report and listen for commentary around customer traction in AI and cloud – these will shape the sentiment and projections for Teradata’s stock in the coming months.
Technical & Fundamental Analysis 🔍
From both a technical market perspective and a fundamental valuation standpoint, Teradata’s stock presents an interesting case of improving signals:
Technical Analysis: The recent rally has markedly improved TDC’s technical picture. The stock’s surge above the 200-day moving average (around $22.72) is a bullish indicator [110]. In fact, the stock hadn’t traded above its 200-day MA in several months, so this breakout may signal a trend reversal to the upside. Additionally, Teradata shares likely cleared the 50-day moving average (~$20 prior to earnings) during the jump, and trading momentum is strong – the Relative Strength Index (RSI) has moved from oversold levels into a healthier range (mid-50s, per AltIndex data [111]), indicating neither overbought nor oversold conditions, but with an upward bias. The volume on the breakout was significantly above average, which technicians view as confirmation of the price move’s validity.
Chart-wise, Teradata now faces some potential resistance in the upper-$20s (around $28-$30) – levels that coincided with price peaks earlier in 2025. If the stock’s strength continues, those levels could be tested; a push above $30 would be very bullish but may require fundamental news (like another strong quarter or positive industry development). On the support side, the previous resistance (the $22-$23 zone around the 200-day MA) becomes a new support level – investors will watch if the stock pulls back, that it can stay above ~$22 to maintain the newfound positive momentum. Another support is the recent gap around $21 (the pre-earnings price); chart analysts often expect partial retracements into big gap-ups, so a dip toward $22-$21 could attract buyers who see Teradata as a value play.
It’s also worth noting that Teradata’s short interest has not been very high (short interest ratio around 8 days to cover [112]), so this rally was likely driven by fundamental buyers rather than a short squeeze. Moving averages are now aligning bullishly (a “golden cross” of shorter-term average crossing above the longer-term could be in play if the strength holds), and technical analysis channels have flagged the 200-day MA crossover as a bullish signal for TDC [113]. In summary, technically the stock’s trend has shifted upward, with key levels to watch at ~$22 (support) and ~$28 (next resistance).
Fundamental Analysis: On fundamental metrics, Teradata looks reasonably valued to slightly undervalued, especially relative to the broader tech sector. At ~$25 per share, TDC’s forward price-to-earnings (P/E) ratio is around 9–10 [114]. That’s significantly lower than the market average P/E and even below many legacy tech peers, reflecting the company’s low growth profile but also suggesting a value stock aspect. Its trailing twelve-month P/E (excluding one-time items) is about 19 [115], which indicates that earnings have grown (or share count reduced) such that forward earnings are higher. The PEG ratio (~0.2) as noted by Evercore is very low [116] – typically a PEG below 1.0 can signal a stock is undervalued relative to its growth (although in Teradata’s case, that growth is coming off a depressed base of earnings, so the metric can be a bit skewed).
On other measures: Price-to-Sales is ~1.2 [117], which means investors are paying about $1.2 for each $1 of Teradata’s annual revenue. This is modest, reflecting the fact that revenue has been stagnant/down. By comparison, high-growth cloud data peers (like Snowflake) trade at double-digit P/S multiples – though Snowflake is growing much faster. Price-to-Book for Teradata is higher (over 11x) [118], but book value is less meaningful here due to heavy share buybacks reducing equity. Importantly, Teradata has no dividend yield (0%) [119], choosing to return capital via buybacks and focus on using cash for growth. Some value investors prefer dividend payers, but Teradata’s strategy is to plow cash into share repurchases (which can be just as accretive, evidenced by a ~5% reduction in share count over the past year).
Looking at financial health, debt levels appear high relative to equity (debt-to-equity > 300% [120]), but Teradata’s absolute debt (~$567M) is only about 1.5 times its annual EBITDA, which is quite manageable. The company’s strong cash flow and $500M+ cash reserve further mitigate debt concerns. Credit-wise, Teradata is not heavily leveraged by typical standards, and interest coverage is solid – thus fundamental risk from the balance sheet is low.
When evaluating fundamentals, one should also consider Teradata’s competitive moat and market position (discussed more below). The company’s fundamentals benefit from a loyal enterprise customer base, high switching costs (it’s not easy for a Fortune 500 bank to rip out a Teradata system overnight), and a reputation for performance at scale. These qualitative factors help justify that Teradata can trade at least at market-multiple valuations. If Teradata succeeds in reigniting even modest revenue growth (say low-to-mid single digits) while maintaining strong margins, there is a case that the stock’s valuation multiples could expand (for example, P/E going to 15x would imply a higher stock price if earnings stay strong).
Summing up fundamentals: Teradata is profitable, cash-generative, and not expensively priced. Its valuation reflects caution about growth, but also provides a margin of safety. The stock’s current multiples imply low market expectations, which means if Teradata can deliver upside surprises (as it just did in Q3) and prove that its cloud/AI transition will eventually yield growth, the stock could re-rate higher. On the flip side, the low valuation also indicates that if Teradata stumbles or if the market worries about its competitiveness, there may be limited downside because a lot of bad news is arguably already priced in. This dynamic of low expectations (value) vs. potential improvement (catalyst) makes Teradata an intriguing fundamental story for investors with a balanced risk-reward outlook.
Competitor Landscape & Market Position 🌐
Teradata operates in a highly competitive space at the intersection of data warehousing, cloud databases, and analytics services. Understanding its competitor landscape is key to assessing its market position:
Primary Competitors: Historically, Teradata’s competitors were other enterprise data warehouse providers – think IBM (with Netezza), Oracle (with Exadata and Oracle Database), and Microsoft (SQL Server for analytics). In the last decade, however, the landscape shifted dramatically to cloud-based data platforms. Today, Teradata’s fiercest competitors include:
- Snowflake: A cloud-native data warehousing company that has taken the industry by storm. Snowflake’s cloud data platform is known for its ease-of-use and scalability, and it has been adopted by many new analytics projects. Snowflake’s rapid growth (albeit recently slowing) and its focus on multi-cloud data warehousing make it a direct alternative to Teradata for many workloads. Snowflake is much larger by market cap and invests heavily in innovation, so Teradata often finds itself compared against Snowflake in terms of technology and pricing. Teradata’s counter is that Teradata offers better performance at scale and more mature workload management, plus potentially lower total cost for very large deployments. Indeed, Teradata has published comparisons (e.g., “Teradata VantageCloud vs Snowflake” whitepapers [121]) to make the case that for enterprise-scale, Teradata can be more efficient. Nonetheless, Snowflake remains a top competitor, especially for cloud-first customers.
- Cloud Vendor Offerings (AWS, Azure, GCP): Each major cloud provider has its own analytics databases – Amazon Redshift, Google BigQuery, and Microsoft Azure Synapse. These are fully managed services integrated into their respective cloud ecosystems. They often have an advantage for customers already deeply invested in one cloud environment. Teradata, by contrast, pitches itself as cloud-agnostic and hybrid (run anywhere). While Teradata can run on AWS/Azure/GCP infrastructure, it competes with the native offerings on performance, features, and the ability to handle multi-cloud or on-prem data together. Many enterprises use a combination, sometimes keeping Teradata for core heavy analytics and using, say, BigQuery for certain new applications. The competition here is intense, as these tech giants have resources to continuously improve their products and sometimes offer them at aggressive prices as part of cloud deals. Teradata’s edge is its long experience in complex analytics and features like QueryGrid (which lets queries federate across different systems).
- Databricks and AI Platforms: With the rise of AI and data lakes, companies like Databricks (with its Lakehouse platform) and even open-source platforms like Hadoop in the past, are adjacent competitors. Databricks in particular, now valued at over $100B in private markets [122], offers a unified platform for data engineering, data science, and analytics, often using Apache Spark. While not a traditional RDBMS like Teradata, Databricks is winning analytics workloads that could otherwise have gone to something like Teradata. To counter this, Teradata has integrated data lake capabilities (Vantage can query data in data lakes) and emphasized robust AI/ML support. The lines between a “warehouse” and a “lakehouse” are blurring, and Teradata aims to serve both roles (structured and unstructured analytics). Still, in AI-centric use cases, Teradata must prove it can be as flexible and developer-friendly as the new generation platforms.
- Legacy and Niche Competitors: Oracle remains a competitor, especially where an Oracle database is already in use (Oracle is pushing its Autonomous Data Warehouse cloud service). IBM has its Db2 and acquired Netezza (rebranded as IBM Performance Server) – they still have some presence. Smaller players like Exasol or Vertica (Micro Focus) sometimes compete on high-performance analytics. There are also specialized NoSQL and NewSQL databases for analytics (Google’s AlloyDB, etc.) but those are more niche. In the analytics software realm, Teradata also indirectly competes with enterprise analytics solutions from SAP (SAP HANA) – in fact, Teradata’s lawsuit against SAP was rooted in competition in this space, where SAP’s HANA in-memory database was seen as an alternative for ERP-related analytics.
Market Position: Teradata’s market share in the overall data analytics platform market is modest but significant in the high-end segment. It’s often said that Teradata has a small number of very large customers – major banks, retailers, telcos that handle petabytes of data. These customers often stick with Teradata for mission-critical analytics because of its reliability and performance. Teradata’s challenge has been expanding beyond that base and attracting new cloud-native customers or mid-sized firms who might opt for trendier platforms.
One strength for Teradata is its hybrid deployment capability – some highly regulated industries (government, finance) appreciate that they can run Teradata on-prem for sensitive data and in cloud for other workloads, with a unified experience. Teradata has also scored well in independent benchmarks for certain large-scale query performance and price-performance metrics. However, in terms of market narrative, newer firms like Snowflake have captured more mindshare in recent years.
Competitive Moat: Teradata’s “moat” historically was its technology’s ability to handle massive concurrent queries and mixed workloads efficiently. In the era of AI, Teradata is trying to extend that moat by emphasizing “trusted data, security, and governance” – essentially arguing that in a world of AI, having a single source of reliable data (which Teradata provides) is crucial [123] [124]. Enterprises might trust Teradata to manage the core data that feeds AI models with proper controls, more so than a patchwork of newer tools.
That said, the competitive pressure is real. Many companies are evaluating whether they need to pay for Teradata or if they can achieve similar outcomes with cheaper cloud data warehouses. Teradata often ends up co-existing with competitors as part of a broader ecosystem (for example, a company might use Teradata for certain analytics and Snowflake for others). The key for Teradata retaining its market position is showing that it can innovate (with AI, etc.) and offer total cost of ownership benefits at scale that others cannot easily match.
Customer Wins & Partnerships: To gauge market position, investors look at customer wins. Teradata has occasionally announced big contract wins or expansions – e.g., deals with large banks or manufacturers to use Vantage in the cloud. The company also partners with cloud providers and integrators (Accenture, Deloitte, etc.) to reach customers. If Teradata can use its new AI services and AgentBuilder to solve unique industry problems (like advanced fraud detection in banking, or supply chain optimization in retail), it can differentiate itself from generalist platforms.
In summary, Teradata is a seasoned player in an evolving market. It holds a respected if smaller share of the data analytics market, with its strongest foothold in large enterprise deployments requiring high performance and hybrid flexibility. Its competitors range from cloud-native upstarts to tech titans, making it imperative that Teradata continue to innovate and clearly communicate its value proposition (often around scale, trust, and cost-efficiency). The next couple of years, as AI workloads proliferate, will be crucial – Teradata is aiming to be the platform of choice for the AI era, but it will need to outmaneuver fast-moving competitors to secure that position.
Future Outlook & Stock Forecast 🔮
Looking ahead, the outlook for Teradata involves both the company’s business trajectory and the expected performance of its stock. Here’s what to watch in terms of future prospects and forecasts:
Business Outlook: Teradata’s management remains guardedly optimistic about the future. They have reiterated that 2025 is a year of stabilization, and by 2026 and beyond, they aim to return to consistent growth. Key elements of the outlook include:
- Cloud Transition Completion: Teradata expects that by late 2025 or 2026, the revenue headwinds from transitioning customers to subscriptions will mostly annualize. At that point, if Cloud ARR continues to grow (aiming for double-digit growth), total revenue growth should turn positive. The company’s 2028 projections (shared with analysts) foresee revenue of ~$1.6 billion with earnings around $100M [125], essentially flat to slightly down from today in revenue, implying that current consensus expects only modest growth. If Teradata can beat those subdued projections by accelerating cloud adoption (for instance, via its new AI offerings driving demand), there is upside to the long-term outlook.
- AI as Growth Catalyst: Teradata’s future bets are on AI. The introduction of new AI-focused products and services is intended to both deepen relationships with existing clients and attract new ones. If AI Services and AgentBuilder gain traction, Teradata could move into more advisory and high-value solution territory, possibly opening new revenue streams. For example, helping a client deploy an “AI agent” for customer personalization could lead to professional services revenue and increased usage of Teradata’s platform. The broader market trend of AI in the enterprise is a tailwind – corporate AI spending is projected to grow rapidly, and Teradata wants a share of that wallet. The outlook thus includes Teradata increasingly being seen not just as a database vendor, but as a strategic AI data partner for enterprises.
- Competition and Market Growth: The overall pie of data analytics and warehousing is growing as data volumes explode and AI drives more analytics workloads. Even if Teradata’s market share remains constant or even shrinks slightly due to competition, the rising tide of demand could lift its results. However, to truly outperform, Teradata will need to win net new customers or significantly upsell cloud services to existing ones. The future outlook assumes Teradata can at least hold its own against competitors in retaining major clients. Any big customer losses to rivals would be a negative surprise, whereas high-profile client wins (especially those born in the cloud) would signal that Teradata can compete for new business in the modern era.
- Financial Targets: Teradata has not given explicit long-term targets recently, but investors will look for signals such as: resumption of revenue growth (even low single digits would be an improvement), maintenance of ~20%+ operating margins, and steady free cash flow. The company’s ability to continue share buybacks (it has authorization remaining) can also boost EPS growth. On the flip side, if macroeconomic conditions worsen, clients might slow down project spending (impacting ARR growth) – so Teradata’s near-term outlook is also tied to enterprise IT spending trends, which have been mixed but resilient in analytics.
Stock Forecast: For Teradata’s stock, much depends on execution of the above. As of now, the Wall Street 12-month price targets average in the high-$20s. We saw the median at $24 (pre-earnings) [126] and Evercore’s bullish $28 [127]. Since the stock is already around $25, the implication is that analysts see modest upside, with a few outliers seeing significant upside if things go well.
Some possible scenarios for the stock over the next year or two:
- Bull Case: Teradata delivers accelerating cloud ARR growth (exceeding guidance), perhaps with help from new AI deals. Overall revenue stabilizes and starts to rise by late 2026. Earnings continue to beat expectations, and the market begins to re-rate TDC as not just a turnaround value stock but a legitimate growth-and-income story. In this scenario, analysts might raise targets into the $30s. A price target of $35 (the current street high [128]) would likely correspond to maybe 12-13x forward earnings – still a discount to the market, but accounting for improved growth prospects. Some optimistic independent analyses suggest fair value in the low $30s as well, given the company’s cash flows [129]. If the bull case plays out, TDC stock could potentially revisit its pre-pandemic highs (it traded above $40 in 2018 when cloud optimism first took hold). However, that would require a convincing growth narrative and possibly M&A speculation (Teradata as a takeover target isn’t a new idea, though nothing concrete has ever materialized).
- Base Case: Teradata meets its guidance and continues on a slow, steady trajectory – essentially doing enough to keep investors satisfied but not exhilarated. In this case, the stock might grind somewhat higher, in line with earnings growth. With FY25 EPS around $2.40 and perhaps a similar or slightly higher figure for FY26, the stock could trade at 10-12x earnings, implying a price in the mid-to-high $20s. Dividends are unlikely, but continued buybacks could support EPS. The base case assumes no major surprises – the stock could be range-bound, say between $22 and $30, as investors wait for clearer signs of breakout growth or any stumble.
- Bear Case: Risks that could pressure the stock include: a significant slowdown in cloud ARR (meaning the pivot is stalling), loss of a major customer or deal to a competitor, or macro recession causing companies to cut back on data/IT spending (since Teradata’s product is big-ticket). If Teradata were to, for example, miss earnings or guide down in a future quarter, the stock could retreat. In a bearish scenario, one might see the stock revisiting the high-teens. The low analyst target of $22 [130] suggests some think downside is limited to roughly that level absent disaster. Because Teradata has real earnings and cash flow, it’s somewhat insulated compared to unprofitable tech stocks – it’s unlikely to trade at extremely low multiples for long. But if the market loses faith in the turnaround, a P/E of 7-8 on lower forward earnings could happen, justifying a ~$15–$18 stock in a worst case. That seems a less likely outcome unless multiple quarters disappoint.
One additional factor for the outlook: analyst projections of earnings. According to StockAnalysis, analysts expect FY2025 EPS around $2.22 (which Teradata looks on track to beat, given guidance) and FY2026 EPS around $2.33 [131] [132] – that’s only ~5% growth, reflecting skepticism about growth. If Teradata can beat these earnings projections handily (either via better revenue or more buybacks or cost cuts), the stock could positively surprise. Conversely, if those estimates prove too high, it would mean the turnaround is faltering.
Expert Quotes on Outlook: It’s useful to include a perspective from industry watchers. As mentioned earlier, Simply Wall St’s analysis essentially frames the future challenge: shareholders need to see Teradata “reverse ongoing revenue declines and consistently capitalize on AI-driven enterprise demand faster than its competitors” [133]. This sums up the task ahead – show revenue growth via AI/cloud and stay ahead of cloud-native rivals. If Teradata achieves that, the future is bright. If not, the stock could languish.
Another telling quote came from Teradata’s CEO on the Q3 call: “We are affirming our outlook for 2025… [Our platform] is ideal for today’s agentic AI workloads… and our customers know they can rely on Teradata to run those workloads where they choose – the cloud or on-prem, or both.” [134]. This confident stance indicates management’s belief that Teradata’s unique hybrid and high-performance capabilities will secure it a vital role in the AI analytics future.
Bottom Line: The future outlook for Teradata’s stock is cautiously positive, hinging on execution. The market is starting to price in some success (given the recent rally), but there remains a degree of “wait-and-see.” Investors will be looking for proof points in upcoming quarters: continued earnings beats, stabilization of revenue, growth in cloud customer counts, and high-profile AI project wins. Achieving those could propel TDC higher. In contrast, any slip in delivering the promised results could quickly sour sentiment given the competitive backdrop. For now, the consensus seems to be “cautious optimism” – Teradata has momentum, but it must now convert that into sustained growth to fully win over Wall Street. As one might say, the next chapter for Teradata will determine if this legacy data giant can indeed reinvent itself for the AI age, and that narrative will strongly influence where the stock heads in 2026 and beyond.
Sources: Bloomberg Law [135], Business Wire [136] [137], Reuters [138] [139], Investing.com [140] [141], Simply Wall St [142], Technical Analysis Channel [143] [144], TipRanks/TheFly [145], Teradata Press Releases [146] [147], Yahoo Finance (via TradingView) [148], and others as cited throughout.
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