Earnings Estimates Rising for Teradyne (TER): Will It Gain?

Investors might want to bet on Teradyne (TER), as earnings estimates for this company have been showing solid improvement lately. The stock has already gained solid short-term price momentum, and this trend might continue with its still improving earnings outlook.The rising trend in estimate revisions, which is a result of growing analyst optimism on the earnings prospects of this maker of wireless products, data storage and equipment to test semiconductors, should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. This insight is at the core of our stock rating tool -- the Zacks Rank.The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.For Teradyne, strong agreement among the covering analysts in revising earnings estimates upward has resulted in meaningful improvement in consensus estimates for the next quarter and full year.The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate:12 Month EPSCurrent-Quarter Estimate RevisionsThe company is expected to earn $1.18 per share for the current quarter, which represents a year-over-year change of +24.2%.Over the last 30 days, three estimates have moved higher for Teradyne compared to no negative revisions. As a result, the Zacks Consensus Estimate has increased 31.04%.Current-Year Estimate RevisionsFor the full year, the earnings estimate of $3.33 per share represents a change of +3.4% from the year-ago number.There has been an encouraging trend in estimate revisions for the current year as well. Over the past month, five estimates have moved up for Teradyne versus no negative revisions. This has pushed the consensus estimate 6.46% higher.Favorable Zacks RankThe promising estimate revisions have helped Teradyne earn a Zacks Rank #1 (Strong Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision.You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.Bottom LineInvestors have been betting on Teradyne because of its solid estimate revisions, as evident from the stock's 22.4% gain over the past four weeks. As its earnings growth prospects might push the stock higher, you may consider adding it to your portfolio right away.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Teradyne, Inc. (TER): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks