Why Teradata Stock Has Fallen to a One-Year Low


Nov. 9 2015, Published 5:06 p.m. ET

Teradata stock fell 15% to mark a new one-year low

On November 4, 2015, Teradata (TDC), a US-based company that sells analytic data platforms, applications, and related services, reported its 3Q15 earnings results. It also announced that it expects a larger decline in its full year 2015 revenues. It expects full-year 2015 revenues to be ~$2.5 billion, a fall of 7% from fiscal 2014 revenues.

Teradata’s weak performance and softer outlook weighed heavily on its shares, which fell 15% and hit a new one-year low during mid-day trading on November 5, 2015. You can see the path of the share price in the graph below.

[marketrealist-chart id=800640]

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Teradata’s weak outlook temporarily impacted Tableau Software’s share prices

Teradata’s poor performance had a ripple effect on Tableau Software (DATA), whose shares also temporarily fell 5% on November 5. However, Tableau Software, a data analysis player, exceeded analysts’ expectations with its fiscal 3Q15 results and now expects revenue to be in the range of $195–$200 million against analysts’ expectation of $193 million. We’ll look at Tableau Software’s fiscal 3Q15 earnings in detail in a later part of this series.

Teradata leads the analytics space

Teradata is going through a difficult time, as the IT landscape is rapidly changing in favor of the cloud space. The company has announced its planned exit from the marketing app business to focus solely on the data and analytics space.

Teradata’s decision makes sense. If we look at the above graph, we can see that Teradata was placed by Forrester Wave as the market leader in the analytics space above technology heavyweights such as Oracle (ORCL), Microsoft (MSFT), and International Business Machines (IBM).

You can consider investing in the First Trust ISE Cloud Computing ETF (SKYY) to gain exposure to Teradata. SKYY invests 3.2% of its holdings in Teradata.


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