Shares of Teradata (NYSE:TDC) gained more than 15% in yesterday’s trading session on better-than-expected fourth-quarter results. The cloud database and analytics-related software company also provided an upbeat outlook for the full-year 2023.
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Adjusted earnings per share (EPS) of $0.35 exceeded the Street’s expectations of $0.30 but declined 38.6% year-over-year. Also, the company’s Q4 revenues tanked 5% to $452 million, while surpassing analysts’ expectations of $434.7 million.
Further, public cloud annual recurring revenue (ARR) increased 77% from the prior-year quarter to $357 million.
For the full year 2022, the company reported revenue of $1.8 billion, down 6% year-over-year, while adjusted earnings declined 32.5% to $1.64 per share.
Outlook
Regarding guidance for 2023, Teradata expects full-year sales to increase between 1% and 4% year-over-year. Moreover, it anticipates adjusted EPS in the range of $1.90 to $2.06. For Q123, the company is expected to report adjusted earnings between $0.60 and $0.64.
Teradata CFO Claire Bramley said, “We remain on-track to achieve over one billion dollars of cloud ARR in 2025 while driving future margin expansion and free cash flow growth.”
Is Teradata a Good Stock to Buy?
Based on two Hold ratings assigned in the past three months, TDC stock has a Hold consensus rating. The average price target of $37 implies 6.5% downside potential from the current level.
Also, hedge funds have lowered their holdings of the stock. In the last quarter, hedge funds sold 2.5M shares of TDC. Further, the stock has negative signals from stock investors on TipRanks.
