Teradyne Inc (TER)
Return on equity (ROE)
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Net income (ttm) | US$ in thousands | 448,751 | 503,998 | 559,367 | 637,104 | 715,501 | 767,240 | 840,473 | 971,005 | 1,014,589 | 986,879 | 952,879 | 813,468 | 784,147 | 712,892 | 626,034 | 534,523 | 467,470 | 486,185 | 470,303 | 473,943 |
| Total stockholders’ equity | US$ in thousands | 2,525,900 | 2,441,300 | 2,434,880 | 2,449,460 | 2,451,290 | 2,254,120 | 2,298,600 | 2,474,530 | 2,562,440 | 2,537,490 | 2,493,260 | 2,324,550 | 2,207,020 | 1,993,540 | 1,744,550 | 1,550,670 | 1,480,160 | 1,482,640 | 1,479,410 | 1,470,230 |
| ROE | 17.77% | 20.64% | 22.97% | 26.01% | 29.19% | 34.04% | 36.56% | 39.24% | 39.59% | 38.89% | 38.22% | 34.99% | 35.53% | 35.76% | 35.89% | 34.47% | 31.58% | 32.79% | 31.79% | 32.24% |
December 31, 2023 calculation
ROE = Net income (ttm) ÷ Total stockholders’ equity
= $448,751K ÷ $2,525,900K
= 17.77%
Teradyne, Inc.'s return on equity (ROE) has been on a declining trend over the past eight quarters, dropping from 39.24% in Q1 2022 to 17.77% in Q4 2023. This indicates a decrease in the company's ability to generate profits from the shareholders' equity. The decreasing trend suggests that the company may be experiencing challenges in efficiently utilizing its equity to generate returns.
Furthermore, the ROE values have consistently been above 20% until Q4 2022, indicating strong profitability relative to the shareholders' equity. However, the subsequent drop below 20% could raise concerns among investors about the company's profitability and overall financial health.
A declining ROE can be attributed to various factors such as decreasing net income, increasing shareholder equity, or a combination of both. It is essential for Teradyne, Inc. to assess and address the factors contributing to the decreasing ROE to ensure sustainable profitability and shareholders' value in the long run.
Peer comparison
Dec 31, 2023