| Factor | Score | Distribution | Value | Avg | Rank |
|---|---|---|---|---|---|
Valuation | 88 | 6.0x | 17.6x | Top tier | |
Growth | 53 | 1.0% | 7.1% | Around median | |
Quality | 83 | -0.9% | 4.5% | Top tier | |
Safety | 73 | — | 2.6x | Top tier | |
Capital Return | 92 | — | 2.15% | Top tier | |
Momentum | 54 | 31.0% | 2.3% | Around median | |
Sentiment | 36 | 6 | 3 | Bottom tier |
Estimates — analyst targets and a simplified DCF, not investment advice.
Ten ratios that matter, each compared against its sector median and average — so you can see whether a number is rich or cheap relative to peers in the same sector.
Teradata provides a hybrid data, analytics, and AI platform that enables enterprises to run workloads in the cloud or on-premises according to sovereignty, security, and performance requirements. A key portion of income comes from recurring revenue associated with cloud and on-premises subscriptions, alongside consulting services; in Q2 fiscal 2026, recurring revenue was $363 million out of total revenue of $410 million, while consulting services revenue was $39 million.
In Q2 fiscal 2026, total revenue was flat at $410 million, and recurring revenue grew 3% year over year, while total annual recurring revenue increased 1% as reported and 2% in constant currency, and cloud annual recurring revenue grew 8% and 9%, respectively. In contrast, consulting revenue declined 24% to $39 million, showing that the improved recurring mix offset weakness in consulting activity without producing growth in total revenue.
Profitability improved significantly in Q2 fiscal 2026; non-GAAP gross margin increased to 60.5%, up 220 basis points, and operating margin jumped to 21.5% from 16.4% a year earlier. Non-GAAP diluted earnings per share were $0.69, exceeding the high end of the company’s guidance by $0.12, and adjusted free cash flow reached $127 million, while EDGAR data for fiscal 2025 showed revenue of $1.7 billion, gross profit of $987 million, and net income of $130 million.
Automated analysis for informational purposes only — not investment advice.
The average analyst price target is $32 within a range of $28–$34, and the average is approximately 23% below the 52-week range high of $41.78, while the consensus remains “Neutral.” An analysis dated August 9, 2026, cited a price-to-earnings ratio of 5.7 times, which appears low, but the repricing reflects flat Q2 fiscal 2026 revenue and an expected revenue contraction in Q3, offset by margin expansion and higher free cash flow.
Figures in the text are as of 2026-08-31; the live price is shown at the top of the page.
Teradata primarily relies on recurring cloud and on-premises subscriptions, in addition to consulting services. In Q2 fiscal 2026, recurring revenue was $363 million and grew 3%, out of total revenue of $410 million. During the same period, consulting revenue was $39 million after declining 24% year over year.
Teradata announced the platform in May 2026 to combine Teradata Cloud, Teradata Factory, Teradata AI Studio, and the Tera assistant within an architecture designed for agentic AI. The platform and its AI Studio component reached general availability in early Q3 fiscal 2026, and the company recorded early use cases at a South Asian telecommunications company, a Japanese banking group, and a North American financial institution. However, management said these products did not make a material contribution to first-half fiscal 2026 results and that use of the new capabilities may initially consume capacity customers have already purchased.
The company expects recurring revenue to decline between 2% and 4% and total revenue to fall between 4% and 6% year over year in Q3 fiscal 2026. Management explained that recognizing more on-premises subscription revenue upfront under ASC 606 supported the first half and left smaller amounts to be recognized in the second half. Despite this timing, the company maintained its full-year guidance for total revenue, recurring revenue, and total annual recurring revenue.
Non-GAAP gross margin increased to 60.5%, up 220 basis points year over year, driven by a higher recurring revenue mix. Operating margin rose to 21.5% from 16.4%, and non-GAAP diluted earnings per share were $0.69, exceeding the high end of the company’s guidance by $0.12. Adjusted free cash flow also reached $127 million, prompting the company to raise its fiscal 2026 forecast to $330–$350 million.
Teradata ended Q2 fiscal 2026 with net cash of $323 million, a year-over-year increase of $528 million, after repaying the remaining $450 million balance on its term loan. The company repurchased approximately 1.3 million shares for about $40 million during the quarter and is targeting 50% of adjusted free cash flow for repurchases, excluding the SAP settlement benefit. Management prioritized capital allocation as organic investment in research and development first, followed by share repurchases, and then strategic mergers and acquisitions.
The immediate financial risk is the expected decline in total revenue of between 4% and 6% in Q3 fiscal 2026, alongside total annual recurring revenue growth of only 1% in Q2. Consulting revenue also declined 24%, and cloud annual recurring revenue growth was 8% versus a targeted low-double-digit rate. On the execution side, the company faces competition from Snowflake and Databricks and potential pricing pressures on Teradata Factory components during fiscal 2027, while the success of the thesis depends on converting early interest in AI products into actual recurring revenue.
