MeritValue

TERADYNE, INC

TERdata completeness 100%18 fiscal years on file
The thesis, from the filings

TERADYNE, INC earns about 38% on invested capital, far above its ~9% cost of capital, and has bought back 13% of its shares over 5 years — the marks of a durable business run for its owners. The estimate methods put fair value between $35.95 and $40.88 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$3.7B1$3.16B2$2.68B3$2.82B3$3.19B3
Net income$1.01B4$715.5M5$448.8M6$542.4M6$554M6
Operating cash flow$1.1B7$577.9M8$585.2M9$672.2M9$674.4M9
Capital expenditure$132.5M10$163.2M11$159.6M12$198.1M12$224M12
Free cash flow (derived)$965.9M7$414.7M8$425.6M9$474.1M9$450.4M9
Total debt————$200M13
Cash & equivalents$1.12B14$854.8M15$757.6M16$553.4M17$293.8M17
Diluted shares183.6M169.7M164.3M163.3M159.7M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$175.04
your share of equity
Profit it earned you last year
$34.69
Free cash flow it threw off
$28.2
Debt you’d be carrying
$12.52

10 shares is a claim on $175.04 of net worth that earned you $34.69 and generated $28.2 of cash last year, against $12.52 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
38% avg · 5y
FY21 72%FY22 45%FY23 26%FY24 24%FY25 21%

It earned about 38% on invested capital, year after year, against a ~9% cost of capital — the footprint of real pricing power. Competition usually drags returns like this back down; here it hasn't.

seeing a moat in the numbers →
Management signal · capital allocation
−13% shares · 5y

Share count is down 13% over 5 years — management has been buying back stock, quietly handing owners a bigger slice. Total debt has held roughly steady.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0

The 3 estimate methods that apply put fair value between $35.95 and $40.88 a share. They rest on different assumptions, so where they diverge is the story; the Graham Number is a stricter floor, not a target.

DCF · Growth Exit 10Y
$37.84
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth0.0%
  • fcfBase$450.4M
DCF · Growth Exit 5Y
$40.88
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth0.0%
  • fcfBase$450.4M
Earnings Power Value
$35.95
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$554M
  • growthAssumed0.0%
Graham Number
$36.97
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

v. The price question — last, on purpose
Is today’s price fair?
See live price ↗
Type a price. The ledger answers.
Or set your own belief
FCF growth, next 5 years0.0%
Discount rate (WACC)8.93%
Terminal growth2.5%
At your growth, a share is worth $40.88
The three cases
Bear0.0%$40.88
Base0.0%$40.88
Bull5.0%$50.63

Bear/base/bull growth = 0% / filed history / history + 5pp. Type a price to see the return each case implies.

Default growth 0.0%= this company’s own filed history (median-to-median FCF CAGR, clamped 0–20%). Your adjustments are recorded anonymously. They become the “what do owners actually believe” dataset.

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0000950170-24-018701 (Revenues)
  2. 10-K · period ending 2022-12-31 · accession 0000950170-25-023784 (Revenues)
  3. 10-K · period ending 2023-12-31 · accession 0001193125-26-059002 (Revenues)
  4. 10-K · period ending 2021-12-31 · accession 0000950170-24-018701 (NetIncomeLoss)
  5. 10-K · period ending 2022-12-31 · accession 0000950170-25-023784 (NetIncomeLoss)
  6. 10-K · period ending 2023-12-31 · accession 0001193125-26-059002 (NetIncomeLoss)
  7. 10-K · period ending 2021-12-31 · accession 0000950170-24-018701 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-31 · accession 0000950170-25-023784 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0001193125-26-059002 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-12-31 · accession 0000950170-24-018701 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2022-12-31 · accession 0000950170-25-023784 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2023-12-31 · accession 0001193125-26-059002 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2025-12-31 · accession 0001193125-26-059002 (ShortTermBorrowings)
  14. 10-K · period ending 2021-12-31 · accession 0001193125-23-044711 (CashAndCashEquivalentsAtCarryingValue)
  15. 10-K · period ending 2022-12-31 · accession 0000950170-24-018701 (CashAndCashEquivalentsAtCarryingValue)
  16. 10-K · period ending 2023-12-31 · accession 0000950170-25-023784 (CashAndCashEquivalentsAtCarryingValue)
  17. 10-K · period ending 2024-12-31 · accession 0001193125-26-059002 (CashAndCashEquivalentsAtCarryingValue)