TD Cowen analyst Derrick Wood has maintained their neutral stance on TDC stock, giving a Hold rating today.
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Derrick Wood has given his Hold rating due to a combination of factors impacting Teradata’s performance. The company’s fourth-quarter results showed weaker than expected annual recurring revenue (ARR) growth, particularly in its cloud segment, which fell short of both analyst and market expectations. This underperformance in cloud growth, a crucial area for future expansion, has led to a more cautious outlook for the company’s cloud ARR growth projections for fiscal year 2025.
Moreover, Teradata’s management highlighted several new growth strategies, such as adjustments to their go-to-market approach and the introduction of new technological innovations. However, these initiatives are expected to take time to materialize and positively impact ARR growth. Additionally, while cost optimization efforts have improved margins slightly, the overall guidance for fiscal year 2025 remains conservative, with flat margins anticipated. These factors contribute to a measured outlook, justifying the Hold rating.
Wood covers the Technology sector, focusing on stocks such as Salesforce, Microsoft, and ServiceNow. According to TipRanks, Wood has an average return of 17.6% and a 64.37% success rate on recommended stocks.
In another report released today, Morgan Stanley also maintained a Hold rating on the stock with a $29.00 price target.