Teradata (TDC) Stock Forecast & Price Target

Teradata Corp is poised for significant growth as management anticipates a return to Total Annual Recurring Revenue (ARR) growth in the fourth quarter, with expectations for both Cloud and Total ARR to accelerate in the latter half of 2025. The company is experiencing a healthy mix of migrations and expansions from notable clients, alongside improving retention rates that are expected to increase sequentially throughout the year. Additionally, Cloud ARR has demonstrated robust growth at $606 million, reflecting a positive trajectory at 15% growth year-over-year in constant currency.

Teradata Corporation experienced a decline in its non-GAAP gross margin, which fell to 60.3%, primarily due to reduced bookings of services revenue, indicating potential challenges in demand or operational efficiency. Additionally, despite a year-over-year increase in non-GAAP operating margin to 21.8%, this was largely influenced by prior restructuring costs, suggesting that the underlying business may not be performing as well as indicated by this metric alone. Furthermore, the company's total annual recurring revenue (ARR) of $1.442 billion declined by 3% year-over-year, compounded by lowered revenue growth guidance amid ongoing macroeconomic uncertainties, reflecting potential vulnerabilities in its revenue streams.