Teledyne Technologies Inc (NYSE: TDY)

Sector: Technology Industry: Scientific & Technical Instruments CIK: 0001094285
Market Cap 23.87 Bn
P/B 2.26
P/E 29.19
P/S 3.98
ROIC (Qtr) 6.54
Div Yield % 0.00
Rev 1y % (Qtr) 6.65
Total Debt (Qtr) 2.53 Bn
Debt/Equity (Qtr) 0.24

About

Price action

Investment thesis

Bull case

  • Strong operating cash flow of 1.14B provides robust 0.45x coverage of total debt 2.53B, indicating excellent debt servicing capability and financial flexibility.
  • Operating cash flow of 1.14B provides exceptional 763.13x coverage of minority interest expenses 1.50M, showing strong core operations.
  • Operating cash flow of 1.14B provides strong 29.81x coverage of stock compensation 38.40M, indicating sustainable incentive practices.
  • Operating cash flow of 1.14B provides exceptional 18.70x coverage of interest expenses 61.20M, showing strong debt service capability.
  • Robust free cash flow of 1.04B exceeds capital expenditure of 106.50M by 9.75x, indicating strong organic growth funding capability.

Bear case

  • Operating cash flow of 1.14B barely covers its investment activities of (869.90M), with a coverage ratio of -1.32, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (869.90M) provide weak support for R&D spending of 532.70M, which is -1.63x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Cash reserves of 528.60M provide limited coverage of acquisition spending of (764.20M), which is -0.69x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Free cash flow of 1.04B represents just -4x of debt issuance (259.50M), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • Retained earnings of 6.87B provide limited buffer against comprehensive income items of (497.20M), which is -13.81x, indicating elevated exposure to market risks.

Peer comparison

Companies in the Scientific & Technical Instruments
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 GRMN Garmin Ltd 38.77 Bn 24.68 5.58 0.16 Bn
2 KEYS Keysight Technologies, Inc. 34.91 Bn 41.07 6.49 2.78 Bn
3 COHR Coherent Corp. 28.91 Bn 244.51 4.78 3.51 Bn
4 TDY Teledyne Technologies Inc 23.87 Bn 29.19 3.98 2.53 Bn
5 TRMB Trimble Inc. 19.54 Bn 54.65 5.43 1.39 Bn
6 FTV Fortive Corp 18.68 Bn 31.02 3.31 3.31 Bn
7 MKSI Mks Inc 10.78 Bn 38.63 2.81 4.55 Bn
8 CGNX Cognex Corp 6.14 Bn 55.76 6.32 0.08 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.70 2.20
EV to Cash from Ops. EV/CFO 22.87 9.84
EV to Debt EV to Debt 10.33 22.70
EV to EBIT EV/EBIT 24.73 15.74
EV to EBITDA EV/EBITDA 18.88 11.58
EV to Free Cash Flow [EV/FCF] EV/FCF 25.21 24.79
EV to Market Cap EV to Market Cap 1.10 -2.78
EV to Revenue EV/Rev 4.36 6.45
Price to Book Value [P/B] P/B 2.26 7.12
Price to Earnings [P/E] P/E 29.19 13.89
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -16.40
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 -7.19
Dividend per Basic Share Div per Share (Qtr) 0.00 0.31
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 6.83
Interest Coverage Int. cover (Qtr) 17.30 -13.61
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -12.22 -21.70
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -5.78 101.63
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 1.97
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -13.41 19.84
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 3.95 17.31
EBIT Growth (1y) % EBIT 1y % (Qtr) 3.28 20.90
EBT Growth (1y) % EBT 1y % (Qtr) 3.34 82.68
EPS Growth (1y) % EPS 1y % (Qtr) -12.78 65.55
FCF Growth (1y) % FCF 1y % (Qtr) 11.75 32.88
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 6.26 34.27
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.39 0.49
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.05
Cash Ratio Cash Ratio (Qtr) 0.29 2.99
Current Ratio Curr Ratio (Qtr) 1.79 4.83
Debt to Equity Ratio Debt/Equity (Qtr) 0.24 0.67
Interest Cover Ratio Int Coverage (Qtr) 17.30 -13.61
Times Interest Earned Times Interest Earned (Qtr) 17.30 -13.61
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 23.10 -296.15
EBIT Margin % EBIT Margin % (Qtr) 17.63 -316.09
EBT Margin % EBT Margin % (Qtr) 16.61 -351.37
Gross Margin % Gross Margin % (Qtr) 42.70 40.05
Net Profit Margin % Net Margin % (Qtr) 13.60 -354.10