Is Teradyne, Inc. overvalued or undervalued?

As of 29 January 2025, Teradyne, Inc. has moved from a fair to a very attractive valuation grade, indicating a shift in perception regarding its market value. The company is currently considered undervalued, with a P/E ratio of 23, which is competitive compared to peers like Flex Ltd. at 21.52 and Universal Display Corp. at 31.39. Additionally, Teradyne boasts a PEG ratio of 0.64 and a robust ROCE of 26.43%, suggesting strong profitability relative to its valuation.
In comparison to its peers, Teradyne's EV to EBITDA stands at 18.01, which is favorable against Flex Ltd.'s 11.24 and Universal Display Corp.'s 22.99. Despite recent underperformance against the S&P 500, with a year-to-date return of -30.62% compared to the index's 2.44%, the company's strong fundamentals and attractive valuation metrics position it as a compelling investment opportunity.