Stock Analysis on Net

Teradyne Inc. (NASDAQ:TER)

This company has been moved to the archive! The financial data has not been updated since May 3, 2024.

Analysis of Long-term (Investment) Activity Ratios 

Microsoft Excel

Long-term Activity Ratios (Summary)

Teradyne Inc., long-term (investment) activity ratios

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Net fixed asset turnover 6.01 7.54 9.56 7.91 7.17
Net fixed asset turnover (including operating lease, right-of-use asset) 5.16 6.41 8.12 6.95 6.08
Total asset turnover 0.77 0.90 0.97 0.85 0.82
Equity turnover 1.06 1.29 1.45 1.41 1.55

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).


The analyzed data demonstrates distinct trends in various turnover ratios over the five-year period ending in 2023.

Net Fixed Asset Turnover
This ratio increased from 7.17 in 2019 to a peak of 9.56 in 2021, indicating improved efficiency in generating sales from fixed assets during this period. However, in the subsequent years, the ratio declined notably to 7.54 in 2022 and further to 6.01 in 2023. This downward trend suggests a reduced efficiency in utilizing fixed assets for revenue generation towards the end of the period.
Net Fixed Asset Turnover (Including Operating Lease, Right-of-Use Asset)
The adjusted turnover ratio, which factors in leased assets, followed a similar pattern to the unadjusted one. It rose from 6.08 in 2019 to 8.12 in 2021 and then decreased to 6.41 in 2022 and 5.16 in 2023. The consistent shape of this trend indicates that the changes in asset utilization efficiency are not solely attributable to leased assets but reflect a broader operational pattern.
Total Asset Turnover
The total asset turnover ratio showed moderate fluctuation. It increased from 0.82 in 2019 to 0.97 in 2021, paving the way for a peak indicating better asset utilization overall. Afterward, the ratio experienced a decline to 0.90 in 2022 and a more pronounced drop to 0.77 in 2023, suggesting a diminished ability to generate sales from all assets combined in recent years.
Equity Turnover
The equity turnover ratio exhibited a downward trajectory throughout the period. Starting at 1.55 in 2019, it decreased to 1.41 in 2020, then showed slight fluctuation by inching up to 1.45 in 2021 before declining steadily to 1.29 in 2022 and further to 1.06 in 2023. This trend indicates a gradual reduction in the efficiency with which the company is using shareholder equity to produce sales.

Overall, the data reveals an initial phase of improvement in asset and equity utilization efficiency, predominantly between 2019 and 2021, followed by a consistent decline from 2022 through 2023. This shift could be reflective of changing business conditions or asset management challenges impacting operational effectiveness in the later years.


Net Fixed Asset Turnover

Teradyne Inc., net fixed asset turnover calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data (US$ in thousands)
Revenues 2,676,298 3,155,045 3,702,881 3,121,469 2,294,965
Property, plant and equipment, net 445,492 418,683 387,240 394,800 320,216
Long-term Activity Ratio
Net fixed asset turnover1 6.01 7.54 9.56 7.91 7.17
Benchmarks
Net Fixed Asset Turnover, Competitors2
Advanced Micro Devices Inc. 14.27 15.60 23.41 15.23
Analog Devices Inc. 3.82 5.00 3.70 5.00 4.91
Applied Materials Inc. 9.37 11.18 11.93 10.72 9.55
Broadcom Inc. 16.63 14.94 11.69 9.52 8.81
Intel Corp. 0.56 0.78 1.25 1.38
KLA Corp. 10.17 10.84 10.44 11.17 10.18
Lam Research Corp. 9.39 10.46 11.22 9.37 9.12
Micron Technology Inc. 0.41 0.80 0.83 0.69 0.83
NVIDIA Corp. 7.09 9.69 7.76 6.52
Qualcomm Inc. 7.10 8.55 7.36 6.34 7.88
Texas Instruments Inc. 1.75 2.91 3.57 4.42
Net Fixed Asset Turnover, Sector
Semiconductors & Semiconductor Equipment 1.66 2.11 2.31 2.13
Net Fixed Asset Turnover, Industry
Information Technology 3.78 4.44 4.74 4.57

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 2023 Calculation
Net fixed asset turnover = Revenues ÷ Property, plant and equipment, net
= 2,676,298 ÷ 445,492 = 6.01

2 Click competitor name to see calculations.


Revenues
The revenue figures indicate an overall growth trend from 2019 to 2021, with revenues increasing from approximately 2.29 billion USD in 2019 to 3.70 billion USD in 2021. However, subsequent years show a decline, with revenues dropping to about 3.16 billion USD in 2022 and further falling to approximately 2.68 billion USD in 2023. This suggests a peak in revenue in 2021 followed by a reversal in the two subsequent years.
Property, Plant and Equipment, Net
The net value of property, plant, and equipment demonstrates a consistent upward trend over the five-year period. Starting at roughly 320.2 million USD in 2019, the value steadily increased each year, reaching around 445.5 million USD in 2023. This continuous investment in fixed assets indicates ongoing capital expenditure or asset accumulation despite the fluctuation in revenues.
Net Fixed Asset Turnover
The net fixed asset turnover ratio, which measures revenue generated per unit of net fixed assets, displays variability over the years. It rose from 7.17 in 2019 to a high of 9.56 in 2021, reflecting increased efficiency or higher revenue generation relative to fixed assets during that period. However, this ratio declined significantly afterward, dropping to 7.54 in 2022 and further to 6.01 in 2023. This reduction aligns with the decrease in revenues while fixed asset values continued to rise, indicating reduced asset utilization efficiency in the most recent years.
Insights
The financial data reveals an initial growth phase peaking in 2021, followed by a downturn in revenue over the last two years. Despite this, investments in property, plant, and equipment have not only been maintained but increased continuously, which contrasts with the declining revenue trend. The decline in net fixed asset turnover reinforces the observation of declining operational efficiency or underutilization of fixed assets. Overall, the company appears to be investing steadily in its fixed asset base even as its revenue-generating performance diminishes.

Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset)

Teradyne Inc., net fixed asset turnover (including operating lease, right-of-use asset) calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data (US$ in thousands)
Revenues 2,676,298 3,155,045 3,702,881 3,121,469 2,294,965
 
Property, plant and equipment, net 445,492 418,683 387,240 394,800 320,216
Operating lease right-of-use assets, net 73,417 73,734 68,807 54,569 57,539
Property, plant and equipment, net (including operating lease, right-of-use asset) 518,909 492,417 456,047 449,369 377,755
Long-term Activity Ratio
Net fixed asset turnover (including operating lease, right-of-use asset)1 5.16 6.41 8.12 6.95 6.08
Benchmarks
Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Competitors2
Advanced Micro Devices Inc. 10.21 11.96 15.37 11.50
Analog Devices Inc. 3.52 4.51 3.24 4.07 4.91
Applied Materials Inc. 8.28 9.56 10.35 9.27 9.55
Broadcom Inc. 13.69 12.12 9.35 7.71 8.81
Intel Corp. 0.56 0.78 1.24 1.36
KLA Corp. 8.46 9.43 9.03 9.36 10.18
Lam Research Corp. 8.30 9.19 9.90 8.06 9.12
Micron Technology Inc. 0.40 0.78 0.82 0.68 0.83
NVIDIA Corp. 5.57 7.46 5.84 4.76
Qualcomm Inc. 6.34 7.62 6.62 5.64 7.88
Texas Instruments Inc. 1.66 2.74 3.27 4.03
Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Sector
Semiconductors & Semiconductor Equipment 1.60 2.04 2.23 2.04
Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Industry
Information Technology 3.32 3.85 4.03 3.87

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 2023 Calculation
Net fixed asset turnover (including operating lease, right-of-use asset) = Revenues ÷ Property, plant and equipment, net (including operating lease, right-of-use asset)
= 2,676,298 ÷ 518,909 = 5.16

2 Click competitor name to see calculations.


Revenue Trends
Revenues demonstrated a rising trend from 2019 to 2021, increasing from approximately 2,295,000 thousand USD in 2019 to a peak of about 3,703,881 thousand USD in 2021. However, revenues declined noticeably in the subsequent years, dropping to approximately 3,155,045 thousand USD in 2022 and further to 2,676,298 thousand USD in 2023. This indicates a period of growth followed by a contraction in sales or service income.
Property, Plant and Equipment (PP&E)
The net value of property, plant, and equipment, inclusive of operating leases and right-of-use assets, showed a continuous upward trend throughout the observed period. Starting at 377,755 thousand USD in 2019, the asset base grew steadily each year, reaching 518,909 thousand USD by the end of 2023. This suggests ongoing investment or capital expenditure in fixed assets over the years, providing a growing asset base.
Net Fixed Asset Turnover Ratio
The net fixed asset turnover ratio reflects the efficiency with which the company utilized its fixed assets to generate revenues. This ratio improved from 6.08 in 2019 to a peak of 8.12 in 2021, indicating increasing efficiency up to that point. However, the ratio declined significantly afterwards, falling to 6.41 in 2022 and further to 5.16 in 2023. The decreasing turnover ratio alongside increasing fixed assets and declining revenues suggests a reduction in asset utilization efficiency in the latter years of the reported period.
Overall Insights
The combined analysis of these metrics reveals that while the company expanded its asset base consistently, the top-line revenue growth was only observed until 2021, followed by a downturn. Concurrently, the asset utilization efficiency peaked in 2021 but worsened in the subsequent years. This could imply challenges in maintaining sales volume relative to the scale of fixed assets or possibly increasing investments not yet yielding proportional revenue returns.

Total Asset Turnover

Teradyne Inc., total asset turnover calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data (US$ in thousands)
Revenues 2,676,298 3,155,045 3,702,881 3,121,469 2,294,965
Total assets 3,486,824 3,501,252 3,809,425 3,652,346 2,787,014
Long-term Activity Ratio
Total asset turnover1 0.77 0.90 0.97 0.85 0.82
Benchmarks
Total Asset Turnover, Competitors2
Advanced Micro Devices Inc. 0.33 0.35 1.32 1.09
Analog Devices Inc. 0.25 0.24 0.14 0.26 0.28
Applied Materials Inc. 0.86 0.96 0.89 0.77 0.77
Broadcom Inc. 0.49 0.45 0.36 0.31 0.33
Intel Corp. 0.28 0.35 0.47 0.51
KLA Corp. 0.75 0.73 0.67 0.63 0.51
Lam Research Corp. 0.93 1.00 0.92 0.69 0.80
Micron Technology Inc. 0.24 0.46 0.47 0.40 0.48
NVIDIA Corp. 0.65 0.61 0.58 0.63
Qualcomm Inc. 0.70 0.90 0.81 0.66 0.74
Texas Instruments Inc. 0.54 0.74 0.74 0.75
Total Asset Turnover, Sector
Semiconductors & Semiconductor Equipment 0.43 0.50 0.53 0.51
Total Asset Turnover, Industry
Information Technology 0.61 0.65 0.62 0.58

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 2023 Calculation
Total asset turnover = Revenues ÷ Total assets
= 2,676,298 ÷ 3,486,824 = 0.77

2 Click competitor name to see calculations.


Revenues
Revenues increased significantly from 2019 to 2021, reaching a peak in 2021 at approximately 3.7 billion US dollars. However, after 2021, revenues declined over the next two years, dropping to about 2.7 billion US dollars in 2023. This represents a notable reversal after a period of strong growth.
Total Assets
Total assets showed a steady upward trend from 2019 through 2021, increasing from roughly 2.8 billion to nearly 3.8 billion US dollars. In 2022, total assets declined somewhat and stabilized around 3.5 billion US dollars, with a marginal decrease continuing into 2023.
Total Asset Turnover
The total asset turnover ratio moved upward from 0.82 in 2019 to a high of 0.97 in 2021, indicating improved efficiency in generating revenues from assets during that period. However, this ratio decreased afterward, falling to 0.77 in 2023, the lowest point in the observed range. This suggests a reduction in asset utilization efficiency in the most recent years.
Overall Analysis
The data show a period of robust growth in revenues and asset base through 2021, accompanied by increasingly efficient asset utilization. After 2021, the decline in revenues and the falling total asset turnover ratio, alongside a modest reduction in total assets, suggest challenges in maintaining growth momentum and operational efficiency. The trend points to potential difficulties in converting asset investments into revenue in recent periods.

Equity Turnover

Teradyne Inc., equity turnover calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data (US$ in thousands)
Revenues 2,676,298 3,155,045 3,702,881 3,121,469 2,294,965
Shareholders’ equity 2,525,897 2,451,294 2,562,444 2,207,018 1,480,158
Long-term Activity Ratio
Equity turnover1 1.06 1.29 1.45 1.41 1.55
Benchmarks
Equity Turnover, Competitors2
Advanced Micro Devices Inc. 0.41 0.43 2.19 1.67
Analog Devices Inc. 0.35 0.33 0.19 0.47 0.51
Applied Materials Inc. 1.62 2.11 1.88 1.63 1.78
Broadcom Inc. 1.49 1.46 1.10 1.00 0.91
Intel Corp. 0.51 0.62 0.83 0.96
KLA Corp. 3.59 6.57 2.05 2.18 1.72
Lam Research Corp. 2.12 2.74 2.43 1.94 2.07
Micron Technology Inc. 0.35 0.62 0.63 0.55 0.65
NVIDIA Corp. 1.22 1.01 0.99 0.89
Qualcomm Inc. 1.66 2.45 3.37 3.87 4.94
Texas Instruments Inc. 1.04 1.37 1.38 1.57
Equity Turnover, Sector
Semiconductors & Semiconductor Equipment 0.78 0.89 1.00 1.06
Equity Turnover, Industry
Information Technology 1.57 1.74 1.80 1.82

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 2023 Calculation
Equity turnover = Revenues ÷ Shareholders’ equity
= 2,676,298 ÷ 2,525,897 = 1.06

2 Click competitor name to see calculations.


Revenue Trends
The revenue exhibited an overall upward trend from 2019 through 2021, increasing from $2,294,965 thousand to a peak of $3,702,881 thousand. However, following this peak, revenues declined notably in the subsequent two years, dropping to $3,155,045 thousand in 2022 and further to $2,676,298 thousand in 2023. This indicates a reversal of growth after 2021, suggesting possible challenges affecting sales or demand in the latter years.
Shareholders' Equity Trends
Shareholders' equity demonstrated consistent growth from 2019 to 2021, rising from $1,480,158 thousand to $2,562,444 thousand. In 2022, equity experienced a slight decrease to $2,451,294 thousand but partially recovered in 2023 to $2,525,897 thousand. Despite minor fluctuations after 2021, the overall trend in shareholders' equity remained positive over the five-year period, indicating sustained value retention or capital accumulation.
Equity Turnover Ratio Trends
The equity turnover ratio showed a steady decline over the analyzed period, decreasing from 1.55 in 2019 to 1.06 in 2023. This suggests that the efficiency with which the company generated revenues from its equity base diminished over time. The decreasing ratio corresponds with the decline in revenues in the last two years, further indicating reduced operational efficiency or asset utilization relative to equity.
Summary Insights
The data reveals a period of growth in both revenues and shareholders' equity up to 2021, followed by a period of revenue decline and a slight dip in equity in subsequent years. The continuous decrease in equity turnover ratio highlights a reduction in the company’s ability to generate sales from its equity. These trends may point to operational or market challenges impacting the company’s performance and efficiency after 2021.