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1. Company Snapshot

1.a. Company Description

Teradata Corporation, together with its subsidiaries, provides a connected multi-cloud data platform for enterprise analytics.The company offers Teradata Vantage, a data platform that allows companies to leverage their data across an enterprise, as well as connects various sources of data to drive ecosystem simplification and support customers on their journey to the cloud through an integrated migration.Its business consulting services include support services for organizations to establish a data and analytic vision, and identify and operationalize analytical opportunities, as well as enable a multi-cloud ecosystem architecture and ensure the analytical infrastructure delivers value.


In addition, it offers support and maintenance services.The company serves clients in financial services, government, healthcare, manufacturing, retail, telecommunications, and travel/transportation sectors through a direct sales force in the Americas, Europe, the Middle East, Africa, the Asia Pacific, and Japan.Teradata Corporation was incorporated in 1979 and is headquartered in San Diego, California.

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1.b. Last Insights on TDC

Teradata Corporation's recent performance was negatively impacted by several factors. The company's institutional investors, such as SG Americas Securities LLC and Federated Hermes Inc., reduced their stakes by 89.9% and 89.9%, respectively. Additionally, the company's stock has a consensus rating of "Hold" from 14 brokerages, with one sell rating and eight hold ratings. Despite beating earnings estimates, Teradata's Q4 earnings report did not provide enough momentum to outweigh the negative sentiment. Furthermore, some investors are cautious, with a recent increase in call options trading and insider sales.

1.c. Company Highlights

2. Teradata's Strong Q4 Results: A Promising Outlook for 2026

Teradata reported a robust fourth quarter, with total revenue reaching $421 million, up 3% year over year as reported and 1% in constant currency. The company's recurring revenue and free cash flow also exceeded expectations. Earnings per share (EPS) came in at $0.74, significantly beating analyst estimates of $0.55. The strong EPS performance was a notable highlight, demonstrating the company's operational discipline and improved quarterly consistency across key financial metrics.

Publication Date: Feb -14

📋 Highlights
  • Strong Q4 Performance:: Exceeded revenue ($421M, +3% YoY), recurring revenue, and free cash flow ($285M) expectations, with cloud ARR up 15% (46% of total ARR).
  • 2026 Guidance:: Targets 2–4% total ARR growth, flat EPS ($2.55–$2.65), and 10% free cash flow growth, with non-GAAP operating margin at 21%.
  • AI and Hardware Innovation:: Launching GPU-enabled on-prem AI platform (Q2–Q3 2026), doubling POC activity, and driving AI workload adoption (2025 production conversions).
  • Board and Governance Refresh:: Adding Melissa Fisher (software executive) to the board and another independent director to strengthen governance.
  • Margin Expansion Drivers:: Gross margin improvements, R&D investment in AI, and cost efficiencies in G&A/sales, targeting operating margin expansion in 2026.

Revenue Growth and ARR Performance

Total ARR grew 3% as reported and 1% in constant currency, with cloud ARR increasing 15% as reported and 13% in constant currency. Cloud ARR now represents 46% of total ARR, indicating a significant shift towards cloud-based solutions. For 2026, Teradata expects total ARR to grow between 2% to 4% year over year, with recurring revenue growth ranging from 0% to 2% and total revenue growth between -2% to 0%. Analysts estimate revenue growth at 1.5% for next year, which is within the company's guidance range.

Margin Expansion and Free Cash Flow

Teradata guided to non-GAAP operating margin expansion in 2026, driven by continued work on gross margin improvement and efficiencies across G&A and sales and marketing lines. The company also expects 10% year-over-year free cash flow growth in 2026, with a free cash flow yield of 9.62%. This is a positive indicator, given the company's current valuation metrics, including a P/E Ratio of 24.01 and an EV/EBITDA of 12.16.

AI and Knowledge Platform

Teradata is well-positioned to capitalize on the AI transition, with a growing ecosystem of partners and a next-generation hardware platform featuring GPUs built-in, enabling AI workloads to run on-prem. The company has doubled POC activity in 2025, with several moving into production, driving workload and usage of the Teradata platform. As Steve McMillan mentioned, "We are looking forward to Teradata three dot zero as driving this autonomous AI and knowledge platform." This strategic focus on AI is expected to drive growth and expand the company's offerings.

Valuation and Outlook

Given Teradata's current valuation metrics, including a P/E Ratio of 24.01 and a P/S Ratio of 1.91, the market appears to have priced in a moderate growth outlook. With the company's guidance for 2026 and its strategic focus on AI, there is potential for upside if Teradata can successfully execute on its plans and drive growth in its cloud and AI offerings. The company's ROE of 66.41% and ROIC of 15.89% also indicate a strong return on equity and invested capital.

3. NewsRoom

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TDC Stock Rises 32% in 6 Months: Will the Momentum Continue in 2026?

Mar -11

Source: zacks.com

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Unstructured and Teradata Partner to Make Enterprise Data AI-Ready at Scale

Mar -09

Source: businesswire.com

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Teradata Enables AI Agents to Autonomously Process Text, Images, and Audio at Enterprise Scale

Mar -09

Source: prnewswire.com

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Elo Mutual Pension Insurance Co Acquires 25,476 Shares of Teradata Corporation $TDC

Mar -06

Source: defenseworld.net

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Teradata Corporation (TDC) Presents at Morgan Stanley Technology, Media & Telecom Conference 2026 Transcript

Mar -03

Source: seekingalpha.com

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WDC vs. TDC: Which Data Infrastructure Stock is the Smarter Bet?

Feb -24

Source: zacks.com

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Teradata to Present at Upcoming Investor Conferences

Feb -23

Source: prnewswire.com

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Sell… Sell… Sell… Another Eight Companies Insiders Are Exiting

Feb -22

Source: investorplace.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.57%)

6. Segments

Services and Other

Expected Growth: 2.5%

Teradata's Services and Other segment growth of 2.5% is driven by increasing demand for cloud-based analytics and consulting services, expansion of existing customer relationships, and growth in emerging markets. Additionally, the company's investments in digital transformation and innovation are contributing to the segment's growth.

Subscription Software Licenses

Expected Growth: 3.5%

Teradata's Subscription Software Licenses growth is driven by increasing demand for cloud-based analytics, expansion into new industries, and growing adoption of hybrid cloud environments. Additionally, the company's investments in emerging technologies such as artificial intelligence and machine learning are contributing to the growth.

Consulting

Expected Growth: 2.0%

Teradata Corporation's 2.0% growth in consulting is driven by increasing demand for data analytics and cloud-based services. The company's expertise in hybrid cloud solutions, artificial intelligence, and machine learning is attracting new clients. Additionally, its strategic partnerships and acquisitions are expanding its market reach, contributing to the growth.

Perpetual Software and Licenses, Hardware and Other

Expected Growth: 1.8%

Teradata's 1.8% growth in Perpetual Software and Licenses is driven by increasing demand for cloud-based analytics and hybrid cloud environments. Hardware growth is fueled by rising adoption of IoT and edge computing. Other segment growth is attributed to growing demand for consulting and managed services, as well as expansion into new markets and industries.

7. Detailed Products

Teradata Vantage

A cloud-based analytics platform that integrates data warehousing, big data analytics, and machine learning to provide a unified analytics environment

Teradata IntelliCloud

A cloud-based analytics platform that provides a managed analytics environment for data warehousing, big data analytics, and machine learning

Teradata IntelliSphere

A software platform that provides data integration, data quality, and data governance capabilities

Teradata QueryGrid

A software platform that enables fast and secure data sharing and analytics across multiple systems and platforms

Teradata Aster

A software platform that provides advanced analytics and machine learning capabilities for big data

Teradata Consulting Services

A professional services organization that provides strategy, implementation, and management services for analytics and data management

8. Teradata Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Teradata Corporation's products and services are highly specialized, making it difficult for substitutes to emerge. However, the increasing adoption of cloud-based solutions and open-source technologies poses a moderate threat of substitutes.

Bargaining Power Of Customers

Teradata Corporation's customers are largely large enterprises and governments, which have limited bargaining power due to their dependence on Teradata's products and services.

Bargaining Power Of Suppliers

Teradata Corporation has a diversified supply chain, and its suppliers have limited bargaining power due to the company's significant market presence and negotiating power.

Threat Of New Entrants

The data analytics and cloud computing markets are highly competitive, and new entrants face significant barriers to entry, including high research and development costs and the need for significant investments in infrastructure and talent.

Intensity Of Rivalry

The data analytics and cloud computing markets are highly competitive, with established players such as Amazon Web Services, Microsoft, and Oracle competing fiercely for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 80.88%
Debt Cost 8.66%
Equity Weight 19.12%
Equity Cost 8.66%
WACC 8.66%
Leverage 422.96%

11. Quality Control: Teradata Corporation passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Marqeta

A-Score: 4.6/10

Value: 5.1

Growth: 7.4

Quality: 3.4

Yield: 0.0

Momentum: 8.0

Volatility: 3.7

1-Year Total Return ->

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Stock-Card
Verint Systems

A-Score: 4.4/10

Value: 6.0

Growth: 4.6

Quality: 6.1

Yield: 0.0

Momentum: 4.0

Volatility: 5.7

1-Year Total Return ->

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Stock-Card
Teradata

A-Score: 3.7/10

Value: 4.2

Growth: 4.1

Quality: 6.5

Yield: 0.0

Momentum: 3.5

Volatility: 3.7

1-Year Total Return ->

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Stock-Card
Remitly Global

A-Score: 3.2/10

Value: 3.2

Growth: 6.0

Quality: 6.2

Yield: 0.0

Momentum: 0.5

Volatility: 3.3

1-Year Total Return ->

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Stock-Card
Five9

A-Score: 3.2/10

Value: 3.5

Growth: 7.4

Quality: 3.8

Yield: 0.0

Momentum: 0.5

Volatility: 3.7

1-Year Total Return ->

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Stock-Card
Confluent

A-Score: 3.2/10

Value: 4.4

Growth: 6.6

Quality: 4.0

Yield: 0.0

Momentum: 2.0

Volatility: 2.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

26.94$

Current Price

26.94$

Potential

-0.00%

Expected Cash-Flows