Summit Research: Teradata's Story 'Remains Unchanged'

Following Teradata's TDC second quarter results on Friday, analysts at Summit Research maintained a positive view of the company's prospects.

Teradata earned $0.72 per share, topping analyst expectations by $0.07. Revenue of $676 million was $15.3 million more than analysts expected. Net income for the quarter fell to $96 million from $108 million in the same quarter a year ago, while gross margin also declined to 56.1 percent from 57.9 percent a year ago.

“We are sticking with Teradata and not losing faith,” Srini Nandury of Summit Research wrote in a note to clients on Friday.

According to the analyst, much of the bad news and the bearish sentiment is already priced in to the stock. The analyst adds that much of the bearish sentiment is reflected in estimates being lowered to the point where Teradata is “likely to at least meet and will likely beat” the estimates in the near term.

Nandury is forecasting revenue growth for 2014 as many of its large clients will begin adding capacity or floor sweep their existing Teradatda devices over the next few months.

As for competition, Nandury isn't worried.

“Many large top-50 customers successfully managed to free up capacity on their existing Teradata devices by migrating some of the workloads to Hadoop and some to point solutions such as in-memory databases such as HANA,” the analyst explains. “However, these solutions are not a complete replacement of an Integrated Data warehouse, but ok alternatives.”

Shares are Buy rated with a $52 price target.