Home > Comparison > Technology > TER vs SLAB
The strategic rivalry between Teradyne, Inc. and Silicon Laboratories Inc. shapes the semiconductor industry’s evolution. Teradyne operates as a capital-intensive manufacturer of automatic test equipment, while Silicon Labs excels as a fabless provider of analog and mixed-signal semiconductor solutions. This head-to-head contrasts scale and industrial automation with specialized innovation. This analysis aims to identify which company offers a superior risk-adjusted return for a diversified portfolio navigating sector cyclicality and technological shifts.
Table of contents
Companies Overview
Teradyne and Silicon Laboratories shape the semiconductor landscape with distinct yet complementary strengths.
Teradyne, Inc.: Automated Testing Pioneer
Teradyne dominates the automatic test equipment market, generating revenue by selling complex testing solutions across semiconductor, industrial automation, and wireless segments. Its 2026 strategy sharpens focus on expanding industrial automation robotics and enhancing semiconductor test platforms, reinforcing its leadership in wafer and device package testing for diverse tech sectors.
Silicon Laboratories Inc.: Analog and Mixed-Signal Innovator
Silicon Labs excels as a fabless semiconductor provider, specializing in wireless microcontrollers and sensor solutions tailored for IoT applications. Its 2026 emphasis lies on deepening presence in connected home, industrial automation, and smart metering markets, leveraging analog-intensive mixed-signal technology to address growing IoT demands globally.
Strategic Collision: Similarities & Divergences
Teradyne and Silicon Labs both serve the semiconductor industry but differ sharply in their core philosophies. Teradyne builds a hardware-centric ecosystem focused on testing and automation, while Silicon Labs pursues a fabless, design-driven model targeting IoT integration. Their primary battleground is the expanding industrial and IoT automation market. These distinctions create contrasting investment profiles: Teradyne offers scale and hardware dominance, Silicon Labs agility and niche innovation.
Income Statement Comparison
This data dissects the core profitability and scalability of both corporate engines to reveal who dominates the bottom line:
| Metric | Teradyne, Inc. (TER) | Silicon Laboratories Inc. (SLAB) |
|---|---|---|
| Revenue | 3.19B | 784.8M |
| Cost of Revenue | 1.32B | 327.8M |
| Operating Expenses | 1.17B | 527.5M |
| Gross Profit | 1.87B | 457.0M |
| EBITDA | 780.0M | -70.5M |
| EBIT | 653.3M | 0 |
| Interest Expense | 8.0M | -1.0M |
| Net Income | 554.0M | -64.9M |
| EPS | 3.49 | -1.98 |
| Fiscal Year | 2025 | 2025 |
Income Statement Analysis: The Bottom-Line Duel
The income statement comparison reveals which company runs a more efficient and profitable business engine over recent years.
Teradyne, Inc. Analysis
Teradyne’s revenue shows a mixed trend, peaking at 3.7B in 2021 before moderating to 3.19B in 2025. Net income follows a similar pattern, declining from 1.01B in 2021 to 554M in 2025. The company sustains healthy gross margins around 58.5%, while net margins remain favorable near 17.4%. Recent growth in revenue and gross profit signals operational momentum despite a slight net margin dip.
Silicon Laboratories Inc. Analysis
Silicon Labs expands revenue steadily, reaching 785M in 2025 from 721M in 2021. However, it struggles to convert sales into profit, recording a negative net margin of -8.3% in 2025 and net losses of 65M. Gross margins hold stable near 58.2%, but operating profitability remains elusive. The latest year shows strong revenue and gross profit growth, yet bottom-line losses persist.
Margin Strength vs. Revenue Scale
Teradyne dominates with scale and consistent profitability, delivering solid gross and net margins despite recent margin pressure. Silicon Labs grows revenue faster but fails to generate sustainable net profits. For investors, Teradyne’s proven margin strength and income stability offer a fundamentally safer profile compared to Silicon Labs’ high-growth, loss-making trajectory.
Financial Ratios Comparison
These vital ratios act as a diagnostic tool to expose the underlying fiscal health, valuation premiums, and capital efficiency of the companies compared below:
| Ratios | Teradyne, Inc. (TER) | Silicon Laboratories Inc. (SLAB) |
|---|---|---|
| ROE | 19.8% | 0% |
| ROIC | 18.4% | 0% |
| P/E | 54.6 | -66.5 |
| P/B | 10.8 | 0 |
| Current Ratio | 1.76 | 0 |
| Quick Ratio | 1.41 | 0 |
| D/E | 0.12 | 0 |
| Debt-to-Assets | 8.3% | 0 |
| Interest Coverage | 86.4 | 72.3 |
| Asset Turnover | 0.76 | 0 |
| Fixed Asset Turnover | 4.99 | 0 |
| Payout Ratio | 13.8% | 0% |
| Dividend Yield | 0.25% | 0% |
| Fiscal Year | 2025 | 2025 |
Efficiency & Valuation Duel: The Vital Signs
Financial ratios serve as the company’s DNA, uncovering hidden risks and operational strengths that shape investor decisions.
Teradyne, Inc.
Teradyne posts strong profitability with a 19.8% ROE and a favorable net margin of 17.4%. Its valuation appears stretched, shown by a high P/E of 54.6 and P/B of 10.8. The company maintains disciplined capital allocation, offering a modest 0.25% dividend yield while reinvesting heavily in R&D, fueling sustainable growth.
Silicon Laboratories Inc.
Silicon Laboratories faces challenges with a negative net margin of -8.3% and zero ROE, reflecting operational inefficiencies. Despite favorable valuation metrics like a negative P/E and zero P/B, its lack of liquidity and negative interest coverage flag financial stress. The firm invests heavily in R&D but returns no dividends, signaling growth focus amid uncertainty.
Premium Valuation vs. Operational Safety
Teradyne delivers a superior balance of profitability and financial health despite a pricey valuation. Silicon Laboratories’ unfavorable profitability and liquidity ratios introduce risk despite attractive valuation multiples. Investors prioritizing steady returns and operational resilience may lean toward Teradyne’s profile, while risk-tolerant growth seekers might consider Silicon Laboratories’ potential.
Which one offers the Superior Shareholder Reward?
Teradyne, Inc. (TER) maintains a modest dividend yield around 0.25%-0.5% with a payout ratio near 14%, supported by strong free cash flow coverage above 2x. TER also executes consistent buybacks, enhancing total returns. Silicon Laboratories Inc. (SLAB) pays no dividends, reinvesting aggressively in R&D and growth, but suffers negative net margins and volatile cash flow. While SLAB’s reinvestment strategy aims for long-term expansion, TER’s balanced yield and steady buybacks offer more sustainable, immediate shareholder value. I conclude TER provides the superior total return profile for 2026 investors.
Comparative Score Analysis: The Strategic Profile
The radar chart reveals the fundamental DNA and trade-offs of Teradyne, Inc. and Silicon Laboratories Inc., exposing their core financial strengths and weaknesses side by side:
Teradyne shows a more balanced profile with strong ROE (4) and ROA (5) scores, indicating efficient profit generation and asset use. Silicon Laboratories relies heavily on its valuation edge with a marginally better P/B score (2 vs. 1) but lags significantly in profitability and leverage metrics (ROE and debt-to-equity scores at 1). Teradyne’s moderate debt profile and weak valuation scores suggest growth potential tempered by market skepticism, while Silicon Laboratories faces broader financial challenges.
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Bankruptcy Risk: Solvency Showdown
Teradyne and Silicon Laboratories both reside comfortably in the safe zone with Altman Z-Scores of 20.3 and 24.9, respectively, indicating strong solvency and very low bankruptcy risk in the current economic cycle:
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Financial Health: Quality of Operations
Teradyne’s Piotroski F-Score of 6 outperforms Silicon Laboratories’ 4, signaling better operational quality and internal financial controls. Neither company hits peak health, but Teradyne shows fewer red flags and stronger fundamentals overall:
How are the two companies positioned?
This section dissects the operational DNA of Teradyne and Silicon Laboratories by comparing their revenue distribution by segment and internal strengths and weaknesses. The goal is to confront their economic moats and identify which model delivers the most resilient, sustainable competitive advantage in today’s market.
Revenue Segmentation: The Strategic Mix
This visual comparison dissects how Teradyne, Inc. and Silicon Laboratories Inc. diversify their income streams and reveals where their primary sector bets lie:
Teradyne anchors its revenue in Product sales at $2.29B for 2024, with Services trailing at $525M, showing moderate diversification. Silicon Labs relies almost entirely on its Industrial & Commercial segment at $339M in 2024, indicating high concentration. Teradyne’s mix suggests ecosystem lock-in through hardware and support services, reducing volatility. Silicon Labs’ focus exposes it to higher concentration risk but may capitalize on niche industrial demand.
Strengths and Weaknesses Comparison
This table compares the strengths and weaknesses of Teradyne, Inc. and Silicon Laboratories Inc.:
TER Strengths
- Strong profitability with 17.37% net margin and 19.82% ROE
- Favorable capital structure with low debt ratios
- Robust fixed asset turnover at 4.99
- Consistent revenue from diversified products and services
- Broad global presence including major Asia-Pacific markets
SLAB Strengths
- Favorable price-to-earnings and price-to-book ratios
- Low debt levels indicating conservative leverage
- Presence in industrial and commercial segments
- Steady geographic revenue with notable exposure in China and rest of world
TER Weaknesses
- High weighted average cost of capital at 12.35%
- Elevated valuation multiples with PE of 54.64 and PB of 10.83
- Modest dividend yield of 0.25%
- Neutral asset turnover at 0.76
SLAB Weaknesses
- Negative profitability with -8.27% net margin and zero ROE/ROIC
- Unfavorable liquidity ratios with zero current and quick ratios
- Negative interest coverage indicating financial distress
- Lack of detailed WACC data and weak asset turnover
Teradyne exhibits superior profitability, capital efficiency, and diversified global revenues. Silicon Laboratories shows conservative leverage but faces significant profitability and liquidity challenges. These contrasts highlight different strategic and financial positioning within their markets.
The Moat Duel: Analyzing Competitive Defensibility
A structural moat alone shields long-term profits from relentless competitive erosion. Let’s dissect the moats of Teradyne and Silicon Laboratories:
Teradyne, Inc.: Diversified Automation & Test Equipment Moat
Teradyne’s moat stems from its integrated test platforms and industrial automation, reflected in a solid 20.5% EBIT margin. Despite a declining ROIC trend, new robotics and wireless test products could reinforce its competitive edge in 2026.
Silicon Laboratories Inc.: Analog-Intensive Mixed-Signal Innovation Moat
Silicon Labs relies on specialized mixed-signal ICs for IoT, marked by rapid revenue and gross profit growth but negative net margins. Its ROIC trend is rising, signaling improving capital efficiency and expanding opportunities in industrial and smart home markets.
Moat Battle: Integrated Test Platforms vs. Analog-Mixed Signal Specialization
Teradyne exhibits a wider moat with consistent value creation despite some profitability erosion. Silicon Labs’ deepening ROIC growth shows promise but lacks confirmed value creation metrics. Teradyne remains better positioned to defend its market share today.
Which stock offers better returns?
Both Teradyne, Inc. and Silicon Laboratories Inc. exhibited strong price appreciation over the past year, with significant bullish momentum and accelerating trends shaping their trading dynamics.
Trend Comparison
Teradyne, Inc.’s stock gained 161.08% over the past 12 months, showing a bullish trend with acceleration and a high volatility level (39.2 std deviation). The stock peaked at 269.07 and bottomed at 68.72.
Silicon Laboratories Inc.’s stock rose 55.39% over the same period, also bullish with accelerating momentum but lower volatility (16.05 std deviation). Its highest price reached 203.41, with a low of 89.82.
Teradyne’s stock outperformed Silicon Laboratories by a wide margin, delivering the highest market returns and demonstrating stronger price acceleration during the analyzed year.
Target Prices
Analyst consensus reveals a balanced outlook for Teradyne and Silicon Laboratories, reflecting cautious optimism in the semiconductor sector.
| Company | Target Low | Target High | Consensus |
|---|---|---|---|
| Teradyne, Inc. | 175 | 335 | 276.08 |
| Silicon Laboratories Inc. | 130 | 231 | 173.67 |
Teradyne’s consensus target of $276.08 slightly exceeds its current price of $269.07, signaling moderate upside potential. Silicon Labs’ target consensus at $173.67 sits below its current price of $203.41, suggesting a more cautious stance from analysts.
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How do institutions grade them?
Teradyne, Inc. Grades
This table summarizes recent grades assigned to Teradyne by reputable institutions.
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Cantor Fitzgerald | Maintain | Overweight | 2026-02-04 |
| Goldman Sachs | Maintain | Buy | 2026-02-04 |
| Stifel | Maintain | Buy | 2026-02-04 |
| Evercore ISI Group | Maintain | Outperform | 2026-02-04 |
| Citigroup | Maintain | Buy | 2026-02-04 |
| Evercore ISI Group | Maintain | Outperform | 2026-02-03 |
| Cantor Fitzgerald | Maintain | Overweight | 2026-02-02 |
| Stifel | Maintain | Buy | 2026-01-30 |
| UBS | Maintain | Buy | 2026-01-26 |
| B of A Securities | Maintain | Buy | 2026-01-22 |
Silicon Laboratories Inc. Grades
This table shows recent grades assigned to Silicon Laboratories by recognized grading companies.
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Benchmark | Downgrade | Hold | 2026-02-04 |
| Keybanc | Downgrade | Sector Weight | 2026-02-04 |
| Needham | Downgrade | Hold | 2026-02-04 |
| Susquehanna | Maintain | Neutral | 2025-08-06 |
| Morgan Stanley | Maintain | Equal Weight | 2025-08-06 |
| Barclays | Maintain | Equal Weight | 2025-08-05 |
| Susquehanna | Maintain | Neutral | 2025-07-22 |
| Stifel | Maintain | Buy | 2025-07-18 |
| Keybanc | Maintain | Overweight | 2025-07-08 |
| Benchmark | Maintain | Buy | 2025-05-27 |
Which company has the best grades?
Teradyne consistently receives strong Buy and Outperform grades from leading firms. Silicon Laboratories shows mixed results with recent downgrades and more Hold or Neutral ratings. Teradyne’s grades suggest stronger institutional confidence, potentially influencing investor sentiment and portfolio positioning.
Risks specific to each company
The following categories identify the critical pressure points and systemic threats facing both firms in the 2026 market environment:
1. Market & Competition
Teradyne, Inc.
- Operates in highly competitive semiconductor testing with diversified segments, maintaining strong market presence.
Silicon Laboratories Inc.
- Faces intense competition in analog mixed-signal semiconductors, with narrower product scope and fabless model risks.
2. Capital Structure & Debt
Teradyne, Inc.
- Maintains low debt-to-equity (0.12) and strong interest coverage (81.43), reflecting conservative leverage.
Silicon Laboratories Inc.
- Exhibits near-zero debt but suffers from poor interest coverage and weak liquidity, increasing financial risk.
3. Stock Volatility
Teradyne, Inc.
- High beta (1.82) signals elevated sensitivity to market swings despite large market cap.
Silicon Laboratories Inc.
- Beta (1.56) also indicates volatility; smaller market cap may amplify price fluctuations.
4. Regulatory & Legal
Teradyne, Inc.
- Operations span global markets with potential exposure to semiconductor export controls and IP regulations.
Silicon Laboratories Inc.
- Similar regulatory exposure with additional risks from fabless supply dependencies and international sales.
5. Supply Chain & Operations
Teradyne, Inc.
- Complex supply chains for test equipment reliant on semiconductor manufacturers; moderate asset turnover (0.76).
Silicon Laboratories Inc.
- Fabless model depends on foundries; zero asset turnover data signals operational inefficiency or reporting gap.
6. ESG & Climate Transition
Teradyne, Inc.
- Likely investing in automation and robotics with potential ESG benefits; data on ESG initiatives limited.
Silicon Laboratories Inc.
- ESG exposure unclear; fabless model may reduce direct environmental footprint but supply chain risks remain.
7. Geopolitical Exposure
Teradyne, Inc.
- Significant exposure to US-China trade tensions due to semiconductor industry reliance on global supply chains.
Silicon Laboratories Inc.
- Similar geopolitical risks amplified by smaller scale and dependency on international sales channels.
Which company shows a better risk-adjusted profile?
Teradyne’s strongest risk lies in market volatility and regulatory complexity, while Silicon Labs faces critical financial health and operational risks. Teradyne’s conservative leverage, favorable profitability, and safer Altman Z-score reflect a better risk-adjusted profile. Silicon Labs’ negative margins and liquidity concerns heighten caution. The stark contrast in financial robustness marks Teradyne as the more resilient choice amid 2026 uncertainties.
Final Verdict: Which stock to choose?
Teradyne, Inc. showcases its superpower as a robust value creator with solid returns well above its cost of capital. Its efficiency in capital allocation and consistent cash generation stand out. A point of vigilance remains its declining ROIC trend, which could signal future margin pressure. It suits portfolios focused on aggressive growth with a tolerance for cyclical shifts.
Silicon Laboratories Inc. leverages a strategic moat rooted in rapid revenue growth and heavy R&D investment, aiming to build future competitive advantages. Compared to Teradyne, it presents a riskier profile with weaker profitability and financial metrics but offers potential upside if its innovation cycle succeeds. It fits well with investors pursuing growth at a reasonable price (GARP) and willing to accept volatility.
If you prioritize established profitability and capital efficiency, Teradyne is the compelling choice due to its proven value creation and financial stability. However, if you seek dynamic growth fueled by innovation and can endure short-term losses, Silicon Laboratories offers superior upside potential despite current challenges. Both scenarios require close monitoring of execution risks and market conditions.
Disclaimer: Investment carries a risk of loss of initial capital. The past performance is not a reliable indicator of future results. Be sure to understand risks before making an investment decision.
Go Further
I encourage you to read the complete analyses of Teradyne, Inc. and Silicon Laboratories Inc. to enhance your investment decisions:
