Teradata Corporation (TDC): Among the Worst Performing Software Stocks to Buy According to Analysts
Rizwan Siddiqui
Sun, March 2, 2025
We recently compiled a list of the 10 Worst Performing Software Stocks to Buy According to Analysts. In this article, we are going to take a look at where Teradata Corporation (NYSE:TDC) stands against the other software stocks.
Gartner projects that global software spending will rise by 14.2% in 2025 to $1.25 trillion, making it one of the fastest-growing segments in technology, second only to the data center sector's expected 23.2% growth. This surge highlights the software market's crucial role in driving innovation and operational efficiency across industries. The sector’s sustained expansion is largely fuelled by the rapid adoption of artificial intelligence (AI) and other advanced technologies, which are reshaping business operations and unlocking new investment opportunities.
Teradata Corporation (NYSE:TDC)
YTD returns: -23%
Potential Upside: 22%
Number of Hedge Fund Holders: 26
Teradata Corporation (NYSE:TDC) is a company that helps businesses store, manage, and analyze their data. It specializes in hybrid cloud solutions through its Teradata Vantage platform, which combines data storage, big data analytics, and business tools. This allows companies to organize their data and gain valuable insights to improve decision-making.
On February 11, Teradata Corporation (NYSE:TDC) reported its Q4 2024 earnings, causing its stock to drop 20%, bringing its year-to-date decline to approximately 23%. The company posted an 11% year-over-year decline in Q4 revenue, while its total Annual Recurring Revenue (ARR) fell 6% to $1.47 billion. The 2025 outlook was also weak, with management expecting total revenue to decrease by 4%-6% year-over-year and ARR to grow between 0% to 2% YoY.
The weaker-than-anticipated results and guidance led multiple analysts to lower their price targets. Barclays analyst Raimo Lenschow reiterated his Sell rating and reduced his price target from $30 to $25. Meanwhile, a Guggenheim analyst maintained a Buy rating but adjusted his target price down from $42 to $37. Despite disappointment over missed financial targets and reduced guidance, the analyst noted that there was no clear indication of significant customer attrition to competitors. He also suggested that Teradata Corporation (NYSE:TDC) could be an attractive acquisition target if the market continues to undervalue its stock.
As of the market close on February 28, Teradata Corporation (NYSE:TDC) has a consensus potential upside of 22%.
Overall TDC ranks 9th on our list of worst performing software stocks to buy according to analysts. While we acknowledge the potential of TDC as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than TDC but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.