Common Stock Valuation Ratios (Price Multiples)
Valuation ratios measure the quantity of an asset or flaw (e.g., earnings) associated with ownership of a specified claim (e.g., a share of ownership of the enterprise).
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Teradyne Inc. pages available for free this week:
- Statement of Comprehensive Income
- Balance Sheet: Assets
- Analysis of Long-term (Investment) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Analysis of Geographic Areas
- Selected Financial Data since 2005
- Operating Profit Margin since 2005
- Return on Assets (ROA) since 2005
- Current Ratio since 2005
- Price to Operating Profit (P/OP) since 2005
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Current Valuation Ratios
Teradyne Inc., current price multiples
| Teradyne Inc. | Advanced Micro Devices Inc. | Analog Devices Inc. | Applied Materials Inc. | Broadcom Inc. | Intel Corp. | KLA Corp. | Lam Research Corp. | Micron Technology Inc. | NVIDIA Corp. | Qualcomm Inc. | Texas Instruments Inc. | Semiconductors & Semiconductor Equipment | Information Technology | ||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||||||||||
| Current share price (P) | |||||||||||||||||
| No. shares of common stock outstanding | |||||||||||||||||
| Growth rate (g) | |||||||||||||||||
| Earnings per share (EPS) | |||||||||||||||||
| Next year expected EPS | |||||||||||||||||
| Operating profit per share | |||||||||||||||||
| Sales per share | |||||||||||||||||
| Book value per share (BVPS) | |||||||||||||||||
| Valuation Ratios (Price Multiples) | |||||||||||||||||
| Price to earnings (P/E) | |||||||||||||||||
| Price to next year expected earnings | |||||||||||||||||
| Price-earnings-growth (PEG) | |||||||||||||||||
| Price to operating profit (P/OP) | |||||||||||||||||
| Price to sales (P/S) | |||||||||||||||||
| Price to book value (P/BV) | |||||||||||||||||
Based on: 10-K (reporting date: 2023-12-31).
If the company price multiple is lower then the price multiple of benchmark then company stock is relatively undervalued.
Otherwise, if the company price multiple is higher then the price multiple of benchmark then company stock is relatively overvalued.
Historical Valuation Ratios (Summary)
Teradyne Inc., historical price multiples
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Price to earnings (P/E) | ||||||
| Price to operating profit (P/OP) | ||||||
| Price to sales (P/S) | ||||||
| Price to book value (P/BV) |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
- Price to Earnings (P/E) Ratio
- The price to earnings ratio showed notable fluctuations over the five-year period. It increased from 21.58 in 2019 to a peak of 28.14 in 2020, indicating a higher market valuation relative to earnings during that year. This was followed by a decline to 17.85 in 2021, suggesting a reduced market premium. In 2022, the ratio rose again moderately to 21.98, and then surged significantly to 34.96 in 2023, reflecting a very high valuation multiple relative to earnings by the end of the period.
- Price to Operating Profit (P/OP) Ratio
- The price to operating profit ratio followed a similar trend to the P/E ratio, increasing from 18.22 in 2019 to 23.77 in 2020. It then decreased sharply to 15.08 in 2021, indicating a lower market valuation relative to operating profit. The ratio experienced a moderate increase to 18.9 in 2022, followed by a substantial rise to 31.31 in 2023. This pattern indicates increasing investor confidence or expectations in the company’s operating profitability towards the later years, culminating in a high valuation multiple.
- Price to Sales (P/S) Ratio
- The price to sales ratio saw a significant rise from 4.4 in 2019 to 7.07 in 2020, implying increased market valuation in relation to sales. After 2020, the ratio decreased to 4.89 in 2021 and then stabilized around 4.98 in 2022. It then increased modestly to 5.86 in 2023. The fluctuations suggest changing investor perceptions about the company’s revenue generation capability, with the highest valuation relative to sales in 2020 and more moderate valuations thereafter.
- Price to Book Value (P/BV) Ratio
- The price to book value ratio rose from 6.82 in 2019 to 10 in 2020, indicating a peak market premium over book value in that year. Following this peak, the ratio declined steadily over the subsequent years, reaching 7.07 in 2021, 6.41 in 2022, and further decreasing slightly to 6.21 in 2023. This trend suggests a decreasing investor premium on the company’s net asset value after 2020, possibly reflecting revised market expectations or changes in book value relative to stock price.
Price to Earnings (P/E)
Teradyne Inc., historical P/E calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Net income (in thousands) | ||||||
| Earnings per share (EPS)2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/E ratio4 | ||||||
| Benchmarks | ||||||
| P/E Ratio, Competitors5 | ||||||
| Advanced Micro Devices Inc. | ||||||
| Analog Devices Inc. | ||||||
| Applied Materials Inc. | ||||||
| Broadcom Inc. | ||||||
| Intel Corp. | ||||||
| KLA Corp. | ||||||
| Lam Research Corp. | ||||||
| Micron Technology Inc. | ||||||
| NVIDIA Corp. | ||||||
| Qualcomm Inc. | ||||||
| Texas Instruments Inc. | ||||||
| P/E Ratio, Sector | ||||||
| Semiconductors & Semiconductor Equipment | ||||||
| P/E Ratio, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 Data adjusted for splits and stock dividends.
2 2023 Calculation
EPS = Net income ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Teradyne Inc. Annual Report.
4 2023 Calculation
P/E ratio = Share price ÷ EPS
= ÷ =
5 Click competitor name to see calculations.
The analysis of the financial data over the five-year period reveals several key trends related to share price, earnings per share (EPS), and the price-to-earnings (P/E) ratio.
- Share Price
- The share price experienced a significant increase from 60.49 US$ at the end of 2019 to a peak of 132.39 US$ at the end of 2020. After this peak, the price showed a downward correction, declining to 111.52 US$ in 2021, further moving down to 100.77 US$ in 2022, and slightly increasing to 102.48 US$ in 2023. This indicates a period of strong investor enthusiasm followed by stabilization at a lower level than the peak but still substantially higher than the 2019 level.
- Earnings Per Share (EPS)
- EPS demonstrated steady growth in the initial years, increasing from 2.8 US$ in 2019 to 4.7 US$ in 2020, and further to 6.25 US$ in 2021. However, from 2021 onward, EPS declined significantly to 4.59 US$ in 2022, and more sharply to 2.93 US$ in 2023, approaching the initial 2019 level. This trend may reflect challenges in maintaining profitability or increased costs impacting earnings after 2021.
- Price-to-Earnings (P/E) Ratio
- The P/E ratio was 21.58 in 2019 and rose to a peak of 28.14 in 2020, suggesting market optimism amid rising share price and EPS growth. Despite the EPS peaking in 2021, the P/E ratio dropped significantly to 17.85 that same year, likely due to the higher EPS denominator effect. Thereafter, the P/E ratio increased again to 21.98 in 2022 and surged substantially to 34.96 in 2023 despite the declining EPS and relatively stable share price, indicating that the market continued valuing the stock relatively highly or expected future earnings growth despite recent EPS decreases.
Overall, the data suggest an initial growth phase in earnings and share price, followed by earnings decline and share price stabilization. The elevated P/E ratio in 2023 points to high market expectations or potential overvaluation relative to current earnings.
Price to Operating Profit (P/OP)
Teradyne Inc., historical P/OP calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Income from operations (in thousands) | ||||||
| Operating profit per share2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/OP ratio4 | ||||||
| Benchmarks | ||||||
| P/OP Ratio, Competitors5 | ||||||
| Advanced Micro Devices Inc. | ||||||
| Analog Devices Inc. | ||||||
| Applied Materials Inc. | ||||||
| Broadcom Inc. | ||||||
| Intel Corp. | ||||||
| KLA Corp. | ||||||
| Lam Research Corp. | ||||||
| Micron Technology Inc. | ||||||
| NVIDIA Corp. | ||||||
| Qualcomm Inc. | ||||||
| Texas Instruments Inc. | ||||||
| P/OP Ratio, Sector | ||||||
| Semiconductors & Semiconductor Equipment | ||||||
| P/OP Ratio, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 Data adjusted for splits and stock dividends.
2 2023 Calculation
Operating profit per share = Income from operations ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Teradyne Inc. Annual Report.
4 2023 Calculation
P/OP ratio = Share price ÷ Operating profit per share
= ÷ =
5 Click competitor name to see calculations.
- Share Price
- The share price shows a significant increase from 60.49 US dollars in 2019 to a peak of 132.39 US dollars in 2020. After this peak, the price declines over the following years, reaching 100.77 US dollars in 2022 and slightly increasing to 102.48 US dollars in 2023. This trend indicates a sharp rise in market valuation followed by a period of correction and relative stabilization.
- Operating Profit Per Share (OPPS)
- Operating profit per share demonstrates a consistent upward trajectory from 3.32 US dollars in 2019 to a peak of 7.39 US dollars in 2021. However, it then declines substantially to 5.33 US dollars in 2022 and further to 3.27 US dollars in 2023, returning to nearly the same level as in 2019. This fluctuation suggests that operating profitability strengthened significantly through 2021 but weakened considerably thereafter.
- Price to Operating Profit Ratio (P/OP)
- The P/OP ratio displays variability, starting at 18.22 in 2019 and rising to 23.77 in 2020, indicating increased investor valuation relative to operating profitability. It then decreases to 15.08 in 2021, reflecting a more favorable operating profit relative to price. However, the ratio elevates again to 18.9 in 2022 and sharply increases to 31.31 in 2023, suggesting that although the share price relaxed after 2020, the decline in operating profit per share led to a much higher valuation multiple, indicating possible market expectations of future growth or a disconnect between price and current operating performance.
Price to Sales (P/S)
Teradyne Inc., historical P/S calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Revenues (in thousands) | ||||||
| Sales per share2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/S ratio4 | ||||||
| Benchmarks | ||||||
| P/S Ratio, Competitors5 | ||||||
| Advanced Micro Devices Inc. | ||||||
| Analog Devices Inc. | ||||||
| Applied Materials Inc. | ||||||
| Broadcom Inc. | ||||||
| Intel Corp. | ||||||
| KLA Corp. | ||||||
| Lam Research Corp. | ||||||
| Micron Technology Inc. | ||||||
| NVIDIA Corp. | ||||||
| Qualcomm Inc. | ||||||
| Texas Instruments Inc. | ||||||
| P/S Ratio, Sector | ||||||
| Semiconductors & Semiconductor Equipment | ||||||
| P/S Ratio, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 Data adjusted for splits and stock dividends.
2 2023 Calculation
Sales per share = Revenues ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Teradyne Inc. Annual Report.
4 2023 Calculation
P/S ratio = Share price ÷ Sales per share
= ÷ =
5 Click competitor name to see calculations.
- Share Price
- The share price exhibited a significant increase from 60.49 US$ at the end of 2019 to a peak of 132.39 US$ by the end of 2020, reflecting strong market performance or investor sentiment during that period. However, thereafter, the share price declined over the next two years, falling to 111.52 US$ in 2021 and further to 100.77 US$ in 2022, before experiencing a slight recovery to 102.48 US$ by the end of 2023.
- Sales Per Share
- Sales per share followed an upward trend from 13.76 US$ in 2019 to a high of 22.8 US$ in 2021, indicating growing revenue generation on a per-share basis. This positive trend reversed from 2021 onwards, with sales per share decreasing to 20.22 US$ in 2022 and further to 17.48 US$ in 2023, suggesting a decline in sales performance per share in the most recent years.
- Price-to-Sales Ratio (P/S)
- The price-to-sales ratio increased markedly from 4.4 in 2019 to 7.07 in 2020, consistent with the sharp rise in share price relative to sales per share. The ratio then dropped to 4.89 in 2021, followed by a slight recovery to 4.98 in 2022 and a further increase to 5.86 in 2023. This pattern indicates fluctuating market valuation relative to sales, with the valuation multiple remaining elevated compared to the 2019 level but generally below the 2020 peak.
Price to Book Value (P/BV)
Teradyne Inc., historical P/BV calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Shareholders’ equity (in thousands) | ||||||
| Book value per share (BVPS)2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/BV ratio4 | ||||||
| Benchmarks | ||||||
| P/BV Ratio, Competitors5 | ||||||
| Advanced Micro Devices Inc. | ||||||
| Analog Devices Inc. | ||||||
| Applied Materials Inc. | ||||||
| Broadcom Inc. | ||||||
| Intel Corp. | ||||||
| KLA Corp. | ||||||
| Lam Research Corp. | ||||||
| Micron Technology Inc. | ||||||
| NVIDIA Corp. | ||||||
| Qualcomm Inc. | ||||||
| Texas Instruments Inc. | ||||||
| P/BV Ratio, Sector | ||||||
| Semiconductors & Semiconductor Equipment | ||||||
| P/BV Ratio, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 Data adjusted for splits and stock dividends.
2 2023 Calculation
BVPS = Shareholders’ equity ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Teradyne Inc. Annual Report.
4 2023 Calculation
P/BV ratio = Share price ÷ BVPS
= ÷ =
5 Click competitor name to see calculations.
The analyzed financial data reveals several notable trends over the five-year period from 2019 to 2023.
- Share Price
- The share price increased significantly from $60.49 in 2019 to a peak of $132.39 in 2020. However, after this peak, it experienced a decline to $111.52 in 2021 and further decreased to $100.77 in 2022. In 2023, the share price showed a slight recovery, rising to $102.48. Overall, the share price more than doubled from the beginning to the end of the period but exhibited volatility, especially after 2020.
- Book Value Per Share (BVPS)
- BVPS demonstrated a consistent upward trend throughout the period, starting at $8.87 in 2019 and increasing steadily to $16.50 by 2023. This steady growth in book value per share indicates improvement in the company's net asset value on a per-share basis.
- Price-to-Book Value Ratio (P/BV)
- The P/BV ratio rose sharply from 6.82 in 2019 to 10 in 2020, reflecting a period of increased market valuation relative to book value. Subsequently, the ratio decreased in the following years, falling to 7.07 in 2021, 6.41 in 2022, and further to 6.21 in 2023. This decline suggests a normalization or reduced investor premium relative to the book value, despite the continuous increase in BVPS.
In summary, while the book value per share increased steadily over the period, the share price exhibited significant volatility, peaking in 2020 and then declining before stabilizing. The P/BV ratio followed a similar pattern, indicating shifts in market sentiment and valuation perspectives over time.