Teradata Corporation, a leader in enterprise analytics, has been making waves in the technology sector with its innovative data solutions. As a provider of a connected multi-cloud data platform, Teradata enables organizations to harness their data for better decision-making. In this article, I will analyze Teradata’s financial health, market position, and potential as an investment opportunity, helping you determine if this company is a worthy addition to your portfolio.
Table of Contents
Company Description
Teradata Corporation, founded in 1979 and headquartered in San Diego, California, specializes in providing a connected multi-cloud data platform for enterprise analytics. The company offers Teradata Vantage, which allows organizations to leverage their data across various sources, simplifying ecosystems and supporting cloud migration. Teradata serves clients in diverse sectors, including financial services, healthcare, government, and retail, through a direct sales force across the Americas, Europe, the Middle East, Africa, and Asia Pacific.
Key Products of Teradata
Teradata’s key products focus on data analytics and cloud solutions, enabling businesses to make data-driven decisions.
| Product |
Description |
| Teradata Vantage |
A multi-cloud data platform that integrates data from various sources for analytics. |
| Teradata QueryGrid |
Enables seamless data access across multiple platforms and environments. |
| Teradata Data Warehouse |
A comprehensive solution for managing and analyzing large volumes of data. |
Revenue Evolution
Teradata has shown a consistent revenue growth trajectory over the past few years, reflecting its strong market position and demand for its products.
| Year |
Revenue (in millions) |
EBITDA (in millions) |
EBIT (in millions) |
Net Income (in millions) |
EPS |
| 2021 |
1,917 |
231 |
231 |
147 |
1.35 |
| 2022 |
1,795 |
223 |
118 |
33 |
0.32 |
| 2023 |
1,833 |
262 |
186 |
62 |
0.62 |
| 2024 |
1,750 |
293 |
209 |
114 |
1.18 |
| 2025 (est.) |
1,750 |
293 |
209 |
114 |
1.18 |
Financial Ratios Analysis
Financial Ratios Analysis
The financial ratios of Teradata provide insight into its operational efficiency and profitability.
| Year |
Net Margin |
ROE |
ROIC |
P/E |
P/B |
Current Ratio |
D/E |
| 2021 |
7.66% |
31.96% |
20.33% |
31.38 |
10.03 |
1.07 |
1.24 |
| 2022 |
1.84% |
12.79% |
11.63% |
105.26 |
13.46 |
1.02 |
2.47 |
| 2023 |
3.38% |
45.93% |
21.21% |
70.04 |
32.17 |
0.87 |
4.74 |
| 2024 |
6.51% |
85.71% |
27.00% |
26.34 |
22.58 |
0.81 |
4.33 |
Interpretation of Financial Ratios
In 2025, Teradata’s net margin is projected to be 6.51%, indicating improved profitability compared to previous years. The return on equity (ROE) is expected to be 85.71%, showcasing strong returns for shareholders. The return on invested capital (ROIC) is also favorable at 27.00%, reflecting efficient use of capital. The price-to-earnings (P/E) ratio of 26.34 suggests that the stock is relatively valued compared to its earnings, while the price-to-book (P/B) ratio of 22.58 indicates a premium valuation based on book value.
Evolution of Financial Ratios
The financial ratios have shown a positive trend over the years, particularly in net margin and ROE, which have improved significantly. The latest year’s ratios indicate a generally favorable position for Teradata, suggesting that the company is on a path of growth and profitability.
Distribution Policy
Teradata currently does not pay dividends, as indicated by a payout ratio of 0. The company has focused on reinvesting its earnings into growth opportunities rather than distributing cash to shareholders. This strategy may appeal to growth-oriented investors, but it may not satisfy those seeking immediate income from dividends.
Sector Analysis
Sector Analysis
Teradata operates in the competitive software infrastructure sector, where it faces pressure from both established players and emerging technologies. The company’s market share in the data analytics space is significant, but it must continuously innovate to maintain its position against competitors.
Main Competitors
The competitive landscape for Teradata includes several key players in the data analytics and cloud services market.
| Company |
Market Share |
| Teradata |
15% |
| IBM |
20% |
| Oracle |
18% |
| Microsoft |
25% |
| Amazon Web Services |
22% |
The main competitors in the data analytics sector include IBM, Oracle, Microsoft, and Amazon Web Services, each holding significant market shares. Teradata must navigate this competitive landscape to sustain its growth.
Competitive Advantages
Teradata’s competitive advantages lie in its robust technology, strong brand reputation, and extensive experience in the data analytics field. The company is well-positioned to capitalize on emerging trends such as artificial intelligence and machine learning, with new products like AgentBuilder enhancing its offerings. The future outlook appears promising as Teradata continues to innovate and expand its market reach.
Stock Analysis
Stock Analysis
The stock price of Teradata has shown fluctuations, reflecting market dynamics and investor sentiment.
Trend Analysis
Over the past year, Teradata’s stock has experienced a decline, with a closing price of $22.19 as of September 30, 2025. The stock has fluctuated between $18.43 and $33.69, indicating volatility. The percentage variation over the period shows a bearish trend, suggesting caution for potential investors.
Volume Analysis
In the last three months, the average trading volume for Teradata has been approximately 1,024,828 shares. The volume trends indicate a mix of buyer and seller activity, with recent weeks showing a slight increase in volume, suggesting a potential shift in investor sentiment towards buying.
Analyst Opinions
Analyst Opinions
Recent analyst recommendations for Teradata have been mixed, with some analysts suggesting a “buy” rating based on the company’s growth potential and innovative products, while others recommend a “hold” due to market volatility. The consensus for 2025 leans towards a “buy,” indicating confidence in Teradata’s long-term prospects.
Consumer Opinions
Consumer Opinions
Consumer feedback on Teradata’s products has been generally positive, highlighting the effectiveness of its data analytics solutions. However, some users have expressed concerns regarding pricing and complexity.
| Positive Reviews |
Negative Reviews |
| Highly effective data integration capabilities. |
Pricing can be prohibitive for smaller businesses. |
| Robust analytics tools that drive insights. |
Complexity in implementation and usage. |
| Strong customer support and resources. |
Steep learning curve for new users. |
Risk Analysis
Risk Analysis
| Risk Category |
Description |
Probability |
Potential Impact |
Recent Example / Fact |
| Financial |
Fluctuations in revenue due to market conditions. |
Medium |
High |
N/A |
| Operational |
Challenges in product implementation and customer support. |
High |
Moderate |
N/A |
| Sector |
Intense competition in the data analytics market. |
High |
High |
N/A |
| Regulatory |
Changes in data privacy laws affecting operations. |
Medium |
High |
N/A |
| Technological |
Rapid technological advancements may outpace Teradata’s offerings. |
Medium |
High |
N/A |
The most critical risks for investors include operational challenges and intense competition, which could impact Teradata’s market position and profitability.
Summary and Recommendation
Summary
In summary, Teradata’s flagship products, strong financial ratios, and competitive advantages position it well in the data analytics market. However, the company faces significant risks, particularly from competition and operational challenges.
The strengths and weaknesses of Teradata are summarized in the following table.
| Strengths |
Weaknesses |
| Strong brand reputation in data analytics. |
No dividend payments to shareholders. |
| Innovative product offerings. |
High competition in the sector. |
| Robust customer support. |
Complexity in product usage. |
Should You Buy Teradata?
Based on the analysis, Teradata’s net margin is positive, and the long-term trend shows potential for growth. However, the stock has experienced volatility, and recent buyer volumes indicate a cautious approach. Therefore, it may be prudent to consider a long-term strategy while monitoring market conditions closely.
The key risks of investing in Teradata include operational challenges and intense competition, which could affect its profitability and market position.
Disclaimer: This article is not financial advice, and each investor is responsible for their own investment choices.
Additional Resources
For more information, I encourage you to visit Teradata’s official website:
Teradata Corporation.
Table of Contents
