In the ever-evolving landscape of data management, Teradata Corporation (TDC) and Informatica Inc. (INFA) stand out as key players within the Software – Infrastructure industry. Both companies provide innovative solutions that help enterprises harness the power of their data, yet they adopt distinct approaches to integration and analytics. As an investor, understanding their market overlap and innovation strategies is crucial. In this article, I will guide you through a comparative analysis to uncover which company presents the more compelling investment opportunity.
Table of contents
Company Overview
Teradata Corporation Overview
Teradata Corporation (TDC) specializes in providing a connected multi-cloud data platform for enterprise analytics. Founded in 1979 and headquartered in San Diego, California, the company offers Teradata Vantage, which helps businesses leverage their data across various sources. Teradata focuses on simplifying data ecosystems and supports clients in their cloud migration journeys. With a diverse clientele across sectors like financial services, healthcare, and retail, Teradata emphasizes delivering value through its consulting services, ensuring robust analytical infrastructures for its customers. The company operates on the NYSE and has a market cap of approximately $2.69B.
Informatica Inc. Overview
Informatica Inc. (INFA) develops an AI-driven platform that streamlines data management across multi-cloud and hybrid environments. Established in 1993 and based in Redwood City, California, Informatica’s suite of products includes data integration, quality, and governance tools designed to create a unified and accurate data landscape for enterprises. The platform allows organizations to manage their data seamlessly, supporting analytics and compliance needs. With a market cap of around $7.54B, Informatica serves a wide array of industries, focusing on delivering comprehensive data solutions to enhance operational efficiency.
Key Similarities and Differences
Both Teradata and Informatica operate in the software infrastructure space, offering data management solutions tailored for enterprises. However, while Teradata focuses on providing a multi-cloud analytics platform, Informatica emphasizes AI-powered data integration and governance. Their distinct approaches cater to varying aspects of enterprise data needs, positioning them as complementary players in the market.
Income Statement Comparison
In this section, I present a comparative Income Statement for Teradata Corporation (TDC) and Informatica Inc. (INFA) for the most recent fiscal year, highlighting their financial performance metrics.
| Metric | TDC | INFA |
|---|---|---|
| Revenue | 1.75B | 1.64B |
| EBITDA | 293M | 339M |
| EBIT | 193M | 199M |
| Net Income | 114M | 9.93M |
| EPS | 1.18 | 0.0329 |
Interpretation of Income Statement
In the latest fiscal year, TDC reported a revenue decline from 1.83B to 1.75B, while INFA experienced modest growth from 1.60B to 1.64B. TDC’s net income increased to 114M, indicating improved profitability despite lower revenues, which may be attributed to better cost management. In contrast, INFA continued to struggle with profitability, posting a net income of just 9.93M, reflecting ongoing operational challenges. Both companies demonstrated resilience in their earnings before interest and taxes (EBIT), with TDC maintaining strong margins relative to INFA’s tighter margins. Overall, while TDC shows signs of stabilization, INFA’s performance suggests the need for strategic adjustments to enhance profitability.
Financial Ratios Comparison
In the table below, I present a comparison of key financial metrics for Teradata Corporation (TDC) and Informatica Inc. (INFA) based on the most recent fiscal year data:
| Metric | TDC | INFA |
|---|---|---|
| ROE | 85.71% | 0.43% |
| ROIC | 16.89% | 0.56% |
| P/E | 26.34 | -65.39 |
| P/B | 22.58 | 3.70 |
| Current Ratio | 0.81 | 1.82 |
| Quick Ratio | 0.79 | 1.82 |
| D/E | 4.33 | 0.81 |
| Debt-to-Assets | 33.80% | 35.24% |
| Interest Coverage | 7.21 | 0.87 |
| Asset Turnover | 1.03 | 0.31 |
| Fixed Asset Turnover | 9.07 | 8.75 |
| Payout ratio | 0% | 0.0012% |
| Dividend yield | 0% | 0% |
Interpretation of Financial Ratios
Teradata exhibits strong profitability metrics, particularly with a high ROE and ROIC, indicating effective use of equity and capital. However, its high debt-to-equity ratio raises concerns regarding leverage. In contrast, Informatica’s negative P/E reflects financial struggles, with low profitability ratios and a current ratio over 1 suggesting potential liquidity issues. Investors should exercise caution when considering INFA due to its volatile financial health.
Dividend and Shareholder Returns
Both Teradata Corporation (TDC) and Informatica Inc. (INFA) do not pay dividends. TDC has a 0% dividend payout ratio, indicating a focus on reinvestment to foster growth. Similarly, INFA’s negligible dividend yield reflects its strategy of prioritizing research and development. Despite the lack of dividends, both companies engage in share repurchase programs which can enhance shareholder value. Overall, their approaches emphasize long-term growth potential over immediate cash returns, aiming for sustainable value creation.
Strategic Positioning
In the competitive landscape of the software infrastructure sector, Teradata Corporation (TDC) holds a market cap of 2.69B, with a focus on enterprise analytics through its multi-cloud data platform, Teradata Vantage. Informatica Inc. (INFA), with a larger market cap of 7.54B, leverages AI for data management across hybrid systems. Both companies face competitive pressure from emerging technologies and must continuously innovate to maintain their market shares and adapt to technological disruptions.
Stock Comparison
Over the past year, both Teradata Corporation (TDC) and Informatica Inc. (INFA) have exhibited significant price movements, reflecting varied trading dynamics and investor sentiment.
Trend Analysis
Teradata Corporation (TDC)
- Percentage Change: -33.37% over the past year indicates a bearish trend.
- Notable High/Low: The stock reached a high of 48.99 and a low of 19.73.
- Volatility: The standard deviation is 7.27, suggesting notable price fluctuations.
- Acceleration: The trend shows signs of acceleration, indicating a rapid decline in stock prices.
Informatica Inc. (INFA)
- Percentage Change: -12.68% over the past year also points to a bearish trend.
- Notable High/Low: The highest price was 38.48, while the lowest was 16.67.
- Volatility: The standard deviation of 4.46 indicates moderate price movements.
- Acceleration: Similar to TDC, INFA shows acceleration in its price decline.
In summary, both stocks are currently facing downward trends, and careful consideration is necessary for potential investors looking to enter these markets.
Analyst Opinions
Recent analyst recommendations for Teradata Corporation (TDC) show a consensus rating of “Buy” with a B+ rating from analysts. Notably, the overall score is 3, supported by strong return on equity (5) and return on assets (4) scores, indicating solid profitability. Analysts suggest that TDC’s discounted cash flow potential reinforces its attractiveness. Currently, there are no available recommendations for Informatica Inc. (INFA), leaving its consensus unclear. As I evaluate these insights, I remain cautious and emphasize thorough risk management in investment decisions.
Stock Grades
I have gathered the latest stock ratings for Teradata Corporation (TDC) and Informatica Inc. (INFA) from reputable grading companies. Here’s a breakdown of the grades.
Teradata Corporation Grades
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Citizens | upgrade | Market Outperform | 2025-11-10 |
| Evercore ISI Group | maintain | Outperform | 2025-11-05 |
| Barclays | maintain | Underweight | 2025-11-05 |
| TD Cowen | maintain | Hold | 2025-11-05 |
| UBS | maintain | Neutral | 2025-08-06 |
| Guggenheim | maintain | Buy | 2025-05-07 |
| Barclays | maintain | Underweight | 2025-04-21 |
| Citizens Capital Markets | maintain | Market Perform | 2025-03-18 |
| JMP Securities | maintain | Market Perform | 2025-02-13 |
| RBC Capital | maintain | Sector Perform | 2025-02-12 |
Informatica Inc. Grades
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Guggenheim | downgrade | Neutral | 2025-08-07 |
| UBS | maintain | Neutral | 2025-08-07 |
| Baird | maintain | Neutral | 2025-05-28 |
| JP Morgan | downgrade | Neutral | 2025-05-28 |
| RBC Capital | maintain | Sector Perform | 2025-05-28 |
| Wolfe Research | downgrade | Peer Perform | 2025-05-28 |
| Wells Fargo | maintain | Equal Weight | 2025-05-28 |
| Truist Securities | downgrade | Hold | 2025-05-28 |
| RBC Capital | maintain | Sector Perform | 2025-05-27 |
| UBS | maintain | Neutral | 2025-05-16 |
Overall, Teradata Corporation has seen a positive trend with an upgrade to “Market Outperform” by Citizens, while Informatica Inc. has experienced several downgrades, indicating a more cautious sentiment among analysts. It’s essential to consider these ratings as part of your investment strategy, while also being mindful of the inherent risks involved.
Target Prices
The current target consensus for Teradata Corporation (TDC) and Informatica Inc. (INFA) indicates a stable outlook from analysts.
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| Teradata (TDC) | 24 | 24 | 24 |
| Informatica (INFA) | 27 | 25 | 26 |
For Teradata, analysts expect the stock to reach a target price of 24, which is below its current trading price of 28.34. In contrast, Informatica’s target consensus of 26 suggests a modest upside from its current price of 24.79, reflecting a generally positive sentiment among analysts.
Strengths and Weaknesses
The following table outlines the strengths and weaknesses of Teradata Corporation (TDC) and Informatica Inc. (INFA) based on recent data.
| Criterion | Teradata Corporation (TDC) | Informatica Inc. (INFA) |
|---|---|---|
| Diversification | Moderate | High |
| Profitability | Low (Net Profit Margin: 6.5%) | Very Low (Net Profit Margin: 0.6%) |
| Innovation | Strong | Strong |
| Global presence | Strong | Moderate |
| Market Share | Moderate | High |
| Debt level | High (Debt to Equity: 4.33) | Moderate (Debt to Equity: 0.81) |
Key takeaways from this analysis indicate that while both companies exhibit innovation and presence in the market, Teradata faces significant challenges in profitability and has a high debt level, which may pose risks for investors. On the other hand, Informatica’s higher diversification and market share may provide a more resilient investment option.
Risk Analysis
In this section, I will analyze the key risks associated with Teradata Corporation (TDC) and Informatica Inc. (INFA).
| Metric | Teradata Corporation (TDC) | Informatica Inc. (INFA) |
|---|---|---|
| Market Risk | Moderate | High |
| Regulatory Risk | Low | Moderate |
| Operational Risk | Moderate | High |
| Environmental Risk | Low | Moderate |
| Geopolitical Risk | Low | Moderate |
Both companies face significant operational and market risks. Teradata has a moderate risk profile with a B+ rating, while Informatica struggles with its high operational risk and negative profit margins, indicating potential volatility in performance.
Which one to choose?
In comparing Teradata Corporation (TDC) and Informatica Inc. (INFA), TDC shows a more favorable financial position. TDC boasts a solid gross profit margin of 60.5% and a net profit margin of 6.5%, while INFA’s margins are significantly lower at 6.1% and 0.6%, respectively. TDC also has a better debt profile, with a debt-to-equity ratio of 4.33 compared to INFA’s 0.81, indicating less financial leverage. Despite both companies being in a bearish stock trend, TDC’s recent price action has shown a recovery of 33.85%, outperforming INFA’s stagnant growth. Analyst ratings favor TDC with a grade of B+, while INFA lacks any recent ratings.
Investors focused on growth may prefer TDC, while those prioritizing stability and sustainability might be cautious given the overall market trends affecting both companies. It’s essential to consider the risks involved, including competition and market dependence.
Disclaimer: This article is not financial advice. Each investor is responsible for their own investment decisions.
Go further
I encourage you to read the complete analyses of Teradata Corporation and Informatica Inc. to enhance your investment decisions:
