Shares of Teradata Corp (TDC, Financial) experienced a significant decline, dropping 14.86% today. This movement was influenced by disappointing third-quarter earnings results that failed to meet analyst expectations.
Teradata's revenue growth has shown stagnancy, and its annual recurring revenue (ARR) saw a decrease from the previous year. The company's guidance for the upcoming quarter indicates a likelihood of continued sales declines, further unsettling investors.
The projected growth rate for Public Cloud ARR was revised downwards to between 18% and 22% year-over-year, a drop from the previous forecast range of 28% to 32%. Additionally, the forecasted earnings per share (EPS) for the next quarter did not meet market expectations, adding to the concerns for the stock.
Currently trading at $28.42, Teradata (TDC, Financial) faces several warning signs, including an Altman Z-score of 0.96, which places it in the distress zone and suggests a potential risk of bankruptcy in the next two years. The company also reported insider selling with no insider buying transactions over the past three months, which may contribute to investor distress.
On a positive note, Teradata (TDC, Financial) possesses a high Piotroski F-Score of 8, indicating solid financial health, and an expanding operating margin, which is a good sign of profitability. The company's current valuation ratio shows a price-to-earnings (P/E) ratio of 45.11 and a price-to-book (P/B) ratio of 21.86, highlighting its premium valuation in the market.
Despite the market turbulence, Teradata's (TDC, Financial) operating margin expansion and high Piotroski F-Score present some attractive aspects for investors. However, the high valuation multiples and financial distress indicators warrant caution. The current GF Value for Teradata, as estimated by GuruFocus, is $42.91. This implies that the stock may be undervalued, offering potential upside for long-term investors. You can view the detailed valuation analysis on the GF Value page.
Investors should consider the mixed signals and evaluate their risk appetite before making any investment decisions regarding Teradata (TDC, Financial).
