Topic: Growth Stocks

TERADATA CORP. $45 – New York symbol TDC

TERADATA CORP. $45 (New York symbol TDC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 153.0 million; Market cap: $6.9 billion; Price-to-sales ratio: 2.6; No dividends paid; TSINetwork Rating: Average; www.teradata.com) makes computers and software that capture and store large amounts of a business’s data, including its sales and inventory. It then analyzes this information and identifies buying habits and other trends. That helps its clients maker better business decisions.

In the three months ended September 30, 2014, Teradata’s earnings fell 4.3%, to $111 million from $116 million a year earlier. But per-share earnings rose 1.4%, to $0.71 from $0.70, on fewer shares outstanding.

Revenue gained just 0.2%, to $667 million from $666 million. Revenue in the Americas (61% of the total) fell 1.0%, mainly because many of Teradata’s customers have already upgraded their data analytics systems, weakening demand for new equipment. However, revenue from Teradata’s international operations (39%) gained 1.9%.

The company spent $46 million (or 6.9% of its revenue) on research in the latest quarter, up 7.0% from $43 million (or 6.5% of revenue) a year ago.

The company expects to earn $2.85 to $3.00 a share in 2014. The stock trades at a reasonable 15.4 times the midpoint of that range. However, Teradata continues to face strong competition from bigger competitors like IBM and Oracle.

Teradata is a hold.

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