Topic: Growth Stocks

This tech stock’s sales and earnings rose sharply in 2010

Teradata Corp., symbol TDC on New York, makes computers and software that capture and store large amounts of a business’s data. Teradata then analyzes this information and identifies buying habits and trends.

Teradata is taking advantage of the weak economy to hire new salespeople. That’s helping it enter new markets and offer more technology and services to its existing clients. In the year ended December 31, 2010, the tech stock’s sales climbed 13.5%, to $1.9 billion from $1.7 billion. Sales rose 19% in the Americas, 10% in the Asia-Pacific region, and 3% in Europe, the Middle East and Africa.

The tech stock’s earnings rose 18.5% in 2010, to $301 million from $254 million a year earlier. Earnings per share rose to $1.77 from $1.46, on fewer shares outstanding. The company bought back 3 million of its own shares for $88 million in 2010.

The company has no debt, and holds cash of $883 million, or $5.28 a share. As well, it continues to spend around 8% of its revenue on research.

Teradata trades at 23.3 times its likely 2011 earnings of $2.10. That’s a reasonable p/e ratio in light of the tech stock’s strong growth prospects and high research spending.

You can get our full analysis, including our updated buy/sell/hold advice, on Teradata in an upcoming issue of Wall Street Stock Forecaster. What’s more, you can get one month free when you subscribe today. Click here to learn how.

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