Teradata Corp /De/ (NYSE: TDC)

Sector: Technology Industry: Software - Infrastructure CIK: 0000816761
Market Cap 3.05 Bn
P/B 13.91
P/E 25.82
P/S 1.85
ROIC (Qtr) 18.15
Div Yield % 0.00
Rev 1y % (Qtr) -5.45
Total Debt (Qtr) 573.00 Mn
Debt/Equity (Qtr) 2.62

About

Teradata Corporation, commonly known as TDC, operates in the data management and analytics industry. This market is rapidly expanding due to the growing demand for data-driven insights and decision-making. Teradata's main business activities involve providing a range of solutions and services designed to help organizations enhance business performance, enrich customer experiences, and integrate data across the enterprise. The company's primary product is its cloud-native platform, Teradata Vantage. This platform offers a variety of analytics and...

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Price action

Investment thesis

Bull case

  • Strong operating cash flow of 301M provides robust 0.53x coverage of total debt 573M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 406M provide 4.83x coverage of short-term debt 84M, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 301M provides exceptional 11.15x coverage of interest expenses 27M, showing strong debt service capability.
  • Robust free cash flow of 282M exceeds capital expenditure of 19M by 14.84x, indicating strong organic growth funding capability.
  • Free cash flow of 282M provides exceptional 10.44x coverage of interest expense 27M, showing strong debt service ability.

Bear case

  • Operating cash flow of 301M barely covers its investment activities of (21M), with a coverage ratio of -14.33, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (21M) provide weak support for R&D spending of 275M, which is -0.08x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Cash reserves of 406M provide limited coverage of acquisition spending of (6M), which is -67.67x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating cash flow of 301M provides insufficient coverage of deferred revenue obligations of 539M, which is 0.56x, raising concerns about future service delivery capabilities.
  • High receivables of 309M relative to inventory of 5M (61.80 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.

Product and Service Breakdown of Revenue (2024)

Product and Service Breakdown of Revenue (2024)

Peer comparison

Companies in the Software - Infrastructure
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 MSFT Microsoft Corp 3,563.59 Bn 33.97 12.13 60.56 Bn
2 ORCL Oracle Corp 561.87 Bn 36.43 9.21 124.39 Bn
3 PLTR Palantir Technologies Inc. 413.65 Bn 377.64 106.17 0.24 Bn
4 PANW Palo Alto Networks Inc 126.45 Bn 113.19 13.23 0.35 Bn
5 CRWD CrowdStrike Holdings, Inc. 116.42 Bn -370.56 25.50 0.82 Bn
6 SNPS Synopsys Inc 86.06 Bn 64.60 12.20 14.29 Bn
7 NET Cloudflare, Inc. 62.78 Bn -609.27 31.18 3.50 Bn
8 FTNT Fortinet, Inc. 60.83 Bn 32.47 9.28 1.00 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.85 2.69
EV to Cash from Ops. EV/CFO 10.83 28.91
EV to Debt EV to Debt 5.69 19.83
EV to EBIT EV/EBIT 17.92 -9.95
EV to EBITDA EV/EBITDA 11.69 6.82
EV to Free Cash Flow [EV/FCF] EV/FCF 11.56 26.09
EV to Market Cap EV to Market Cap 1.07 0.36
EV to Revenue EV/Rev 1.98 -9.34
Price to Book Value [P/B] P/B 13.91 3.88
Price to Earnings [P/E] P/E 25.82 -10.66
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -0.30
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 2.71
Dividend per Basic Share Div per Share (Qtr) 0.00 0.10
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 1.68
Interest Coverage Int. cover (Qtr) 6.74 -14.20
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 26.92 -408.01
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 16.67 226.39
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 -0.28
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 41.72 25.27
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -14.15 47.48
EBIT Growth (1y) % EBIT 1y % (Qtr) -2.15 20.13
EBT Growth (1y) % EBT 1y % (Qtr) -0.64 14.16
EPS Growth (1y) % EPS 1y % (Qtr) 44.71 67.50
FCF Growth (1y) % FCF 1y % (Qtr) -5.05 296.60
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -10.89 46.75
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.94 0.67
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.01
Cash Ratio Cash Ratio (Qtr) 0.45 1.22
Current Ratio Curr Ratio (Qtr) 0.90 2.59
Debt to Equity Ratio Debt/Equity (Qtr) 2.62 -0.96
Interest Cover Ratio Int Coverage (Qtr) 6.74 -14.20
Times Interest Earned Times Interest Earned (Qtr) 6.74 -14.20
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 16.40 -548.16
EBIT Margin % EBIT Margin % (Qtr) 11.02 -199.84
EBT Margin % EBT Margin % (Qtr) 9.39 -607.20
Gross Margin % Gross Margin % (Qtr) 59.00 51.88
Net Profit Margin % Net Margin % (Qtr) 7.10 -610.00