Teradata (TDC) shares soared 5% in the last trading session to close at $31.16. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 11.3% loss over the past four weeks.
The increase in share price can be attributed to improving cloud growth, AI-related demand, and a stronger cash profile that supports free cash flow and capital returns. Teradata’s platform, VantageCloud, continues to gain momentum with data-intensive customers running large and complex workloads. In the first quarter, public cloud ARR was $686 million, up 13% year over year as reported, while total ARR rose to $1.492 billion. The company is adding capabilities across cloud and on-premise offerings to meet demand for high-performance, massively scalable hybrid analytics.
Teradata has established partnerships with the top three public cloud providers: AWS, Microsoft Azure, and Google Cloud. These relationships expand global access to VantageCloud and support customers as they balance cloud migration with hybrid requirements. Acquisitions, such as Stemma, enhance Teradata's capabilities in data search and exploration, providing added value to its customers. Teradata is building on this foundation as it expands the Enterprise Vector Store to unify structured and unstructured data within a single governed platform, capable of supporting large vector volumes and high concurrent query demand from AI agents.
If cloud ARR continues growing at a double-digit rate and earnings estimates keep moving higher, the rally could have further room to run.
This data management company is expected to post quarterly earnings of $0.55 per share in its upcoming report, which represents a year-over-year change of +17%. Revenues are expected to be $398.39 million, down 2.4% from the year-ago quarter.
Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.
For Teradata, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on TDC going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Teradata is part of the Zacks Computer- Storage Devices industry. Western Digital (WDC), another stock in the same industry, closed the last trading session 8.5% lower at $670.75. WDC has returned 51.3% in the past month.
For Western Digital, the consensus EPS estimate for the upcoming report has changed +1.9% over the past month to $3.32. This represents a change of +100% from what the company reported a year ago. Western Digital currently has a Zacks Rank of #1 (Strong Buy).
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
