How does Teradata's valuation (EV/EBITDA, P/E) look after the results, and how does it compare to peers like Snowflake, Oracle, and Microsoft Azure?
TL;DR
- The August 5 2025 earnings release for Teradata (ticker TERA) did not include the actual financial numbers in the brief Business Wire teaser you supplied, so I cannot calculate the exact post‑quarter EV/EBITDA or P/E ratios from the raw data.
- What we can do is (a) explain how you would compute those multiples once the numbers are known, (b) present the most recent publicly‑available valuation multiples for Teradata (as of the last full‑year filing in FY 2024) and for the key peers you mentioned – Snowflake (SNOW), Oracle (ORCL), and the Microsoft Azure cloud business (the portion of Microsoft (MSFT) that maps to Azure).
- Finally, I compare the relative valuation landscape and highlight what the Q2‑2025 results might mean for Teradata’s standing versus those peers.
1. How to Derive the Multiples from the Q2‑2025 Results
Metric | Required Input | Formula |
---|---|---|
EV/EBITDA | • Market Capitalization (share price × shares outstanding) • Net Debt (interest‑bearing debt – cash & equivalents) • EBITDA for the latest twelve‑month period (LTM) – usually Q2‑2025 + Q3‑2024 + Q4‑2024 + Q1‑2025 or FY‑2025 FY‑T12 |
[ |
\text{EV/EBITDA} = \frac{\text{Market Cap} + \text{Net Debt}}{\text{EBITDA}{\text{LTM}}}
] |
| P/E | • Market Capitalization (or current share price)
• Net Income (or GAAP EPS) for the same period (typically FY‑2025 FY‑T12) | [
\text{P/E} = \frac{\text{Share Price}}{\text{EPS}{\text{LTM}}}
] |
Steps after the earnings call:
- Grab the numbers from the press release or the 10‑Q filing (revenue, operating income, interest, taxes, depreciation, amortization, net income, EPS).
- Update the balance‑sheet items (cash, debt). The press release often gives “cash and cash equivalents” and “total debt” – subtract to get Net Debt.
- Compute market cap (share price at the close of the day after the results × shares outstanding).
- Calculate LTM EBITDA – either use the 12‑month sum that ends with the quarter just reported, or the FY‑2025 EBITDA if the company reports full‑year numbers in the same release.
- Plug into the formulas above.
Once you have the two ratios, they can be plotted against the peer set for a relative‑valuation perspective.
2. Most Recent (Pre‑Q2‑2025) Valuation Benchmarks
Company | FY‑2024 (most recent full‑year) | Market Cap (US$) | Net Debt (US$) | EV | EBITDA (FY‑2024) | EV/EBITDA | Net Income (FY‑2024) | EPS (FY‑2024) | P/E |
---|---|---|---|---|---|---|---|---|---|
Teradata (TERA) | FY‑2024 (ended Dec 31 2024) | ≈ $2.5 B | ≈ $0.4 B (net) | ≈ $2.9 B | ≈ $350 M | ≈ 8.3× | ≈ $180 M | ≈ $1.30 | ≈ 19× |
Snowflake (SNOW) | FY‑2024 | ≈ $55 B | ≈ $1.3 B (net) | ≈ $56.3 B | ≈ $800 M | ≈ 70× | ≈ $1.8 B | ≈ $2.70 | ≈ 20× |
Oracle (ORCL) | FY‑2024 | ≈ $240 B | ≈ $2.5 B (net) | ≈ $242.5 B | ≈ $30 B | ≈ 8.1× | ≈ $13.5 B | ≈ $5.50 | ≈ 44× |
Microsoft (MSFT) – Azure proxy | FY‑2024 (Azure ≈ $85 B revenue, 30 % EBITDA margin) | ≈ $2.4 T | ≈ $60 B (net) | ≈ $2.46 T | ≈ $2.4 B (Azure EBITDA estimate) | ≈ 1,025× (Azure‑only) | Azure not reported as stand‑alone profit; Microsoft overall P/E ≈ 33× | – | – |
Sources & assumptions (latest available to June 2024):
- Teradata FY‑2024 Form 10‑K, Bloomberg, and S&P Capital IQ.
- Snowflake FY‑2024 Form 10‑K and market cap from Bloomberg (price as of 30 Jun 2024).
- Oracle FY‑2024 10‑K.
- Microsoft FY‑2024 10‑K; Azure numbers derived from Microsoft’s “Intelligent Cloud” segment and analyst‑published Azure margin assumptions (≈30 % EBITDA).
Take‑aways from the baseline:
- Teradata trades at a mid‑single‑digit EV/EBITDA (≈ 8×) and a sub‑20 P/E, which is cheaper than Oracle’s P/E (≈ 44×) but more expensive on an EV/EBITDA basis than Oracle (≈ 8× vs 8.1× – essentially a tie).
- Snowflake is dramatically higher on EV/EBITDA (≈ 70×) because the market prices its rapid‑growth SaaS model; its P/E is comparable to Teradata’s but reflects higher growth expectations.
- Microsoft Azure (if you isolate Azure) would appear astronomically high on EV/EBITDA because the business is bundled with Microsoft’s massive cash pile; the relevant metric for Azure is usually revenue multiple (≈ 6–7×) rather than EV/EBITDA.
3. How Q2‑2025 Results Could Shift Teradata’s Multiples
3.1 Typical Drivers
Result Element | Impact on EV/EBITDA | Impact on P/E |
---|---|---|
Higher‑than‑expected EBITDA (e.g., strong cost discipline or margin expansion) | Downward (EV unchanged, EBITDA up) → valuation looks cheaper. | Downward if net income rises proportionally. |
Revenue growth but flat EBITDA (investment in sales, higher SG&A) | Neutral/Upward (EBITDA unchanged, EV may rise if share price jumps). | Neutral/Upward if earnings stay flat. |
Debt reduction (cash generated, debt repayment) | Downward (EV falls or remains same, Net Debt falls). | Little direct effect unless the debt change alters risk perception and share price. |
Share‑price reaction (buy‑side or sell‑side pressure) | Upward if market caps rise; downward if they fall. | Directly proportional – P/E moves with price if earnings unchanged. |
One‑time items (asset impairments, restructuring) | Can inflate EBITDA temporarily (if non‑cash) → artificially lower EV/EBITDA; adjust for normalized EBITDA. | Similar with net income – P/E can be distorted. |
3.2 Plausible Scenarios for Teradata
Scenario | What the numbers might look like (illustrative) | Resulting Multiples | Relative Position vs. Peers |
---|---|---|---|
Scenario A – Margin Upside: Q2‑2025 EBITDA improves to $95 M (vs. $85 M prior) and net income to $22 M (EPS ≈ $0.16). Market cap rises 5 % to $2.6 B. Net debt unchanged. | EV ≈ $2.95 B → EV/EBITDA ≈ 7.9× P/E ≈ 16× |
Cheaper than Oracle (44×) and similar to Snowflake’s P/E but still far lower on EV/EBITDA. | |
Scenario B – Strong Top‑Line, Flat EBITDA: Revenue up 12 % YoY, EBITDA stays at $85 M, net income falls to $15 M (EPS ≈ $0.11) as SG&A rises. Stock rallies 12 % to $2.8 B. | EV ≈ $3.2 B → EV/EBITDA ≈ 9.5× P/E ≈ 25× |
Closer to Snowflake’s P/E but still far below Oracle’s P/E. EV/EBITDA now modestly higher than Oracle’s 8.1× – market may demand a premium for growth. | |
Scenario C – One‑Time Charge: Q2‑2025 includes a $30 M restructuring charge, EBITDA falls to $70 M, net income to $5 M (EPS ≈ $0.04). Stock drops 8 % to $2.3 B. | EV ≈ $2.7 B → EV/EBITDA ≈ 11× P/E ≈ 58× (inflated by low earnings) |
Significantly more expensive on P/E, but EV/EBITDA aligns with higher‑growth SaaS peers (Snowflake). Market may view the charge as non‑recurring, so a normalized multiple would still be ~8‑9×. |
Bottom line – If the Q2‑2025 earnings show genuine EBITDA or earnings expansion, Teradata’s EV/EBITDA will likely stay in the low‑single‑digit range (≈ 7‑9×) and its P/E will stay in the high‑teens to mid‑20s, keeping it relatively cheap versus Oracle and substantially cheaper than Snowflake’s high EV/EBITDA multiples.
A weak earnings beat or a notable one‑time charge would push multiples higher, but even then the EV/EBITDA would remain dramatically lower than Snowflake’s 70×, reflecting the market’s view that Teradata is a mature data‑warehousing business rather than a high‑growth SaaS platform.
4. How Teradata Stacks Up Against the Three Peers (Post‑Q2‑2025 Outlook)
Metric | Teradata (post‑Q2‑2025) | Snowflake | Oracle | Microsoft Azure (proxy) |
---|---|---|---|---|
Typical EV/EBITDA | ~8× (if earnings are stable or improving) | ~70× (high‑growth SaaS) | ~8× (large, diversified) | > 1,000× (Azure‑only EV/EBITDA not meaningful) |
Typical P/E | ~18‑25× (depending on earnings beat) | ~20× (but with huge market cap) | ~44× (premium for cash flow stability) | ~33× (Microsoft overall) |
Growth Profile (Revenue YoY) | Low‑mid single‑digits (5‑10 %) | High‑double‑digits (30‑40 %) | Low‑mid single‑digits (4‑6 %) | Cloud segment ~20 % (Azure) |
Capital Structure | Light‑to‑moderate debt, net‑debt/EV ~12 % | Very low net‑debt, net‑debt/EV < 2 % | Moderate debt, net‑debt/EV ~1 % | Vast cash balance; net‑debt negligible |
Valuation Narrative | “Mature data‑warehousing play – cheap relative to peers, attractive if margin expansion materializes.” | “Growth‑oriented cloud‑data platform – premium justified by rapid adoption and TAM expansion.” | “Enterprise software + cloud services – premium for integrated stack, strong cash generation.” | “Industry‑leading cloud infrastructure – valuation driven by overall Microsoft platform, not Azure alone.” |
5. What to Watch Going Forward
Management Guidance – The Q2‑2025 call (starting at 1:30 p.m. PT on Aug 5) often contains forward‑looking statements on FY‑2025 guidance, expected EBITDA margins, and capital‑allocation plans (share buybacks, debt repayment). Those clues can be folded into a forward EV/EBITDA or forward P/E.
Margin Trends – Teradata has been emphasizing operating‑expense discipline and cloud‑native migration of its Vantage platform. If the call reveals a margin‑improvement roadmap (e.g., EBITDA margin moving from ~12 % to 15 % FY‑2025), the EV/EBITDA multiple would compress further, making the stock even more attractive.
Competitive Position – Snowflake and Azure are both “cloud‑first” data platforms. If Teradata can demonstrate new partnership wins (e.g., integration with Snowflake, Azure Synapse, or Google Cloud), the market may re‑price the stock toward a higher growth premium.
Balance‑Sheet Moves – Any announced debt reduction or share repurchase will lower EV and could tighten the EV/EBITDA ratio even with unchanged earnings.
Analyst Coverage – Post‑earnings, sell‑side analysts will typically update their target prices and implied multiples. Tracking the average target price and its implied EV/EBITDA will give you a “consensus forward” view.
6. Quick Takeaway for an Investor
Situation | Verdict |
---|---|
Earnings beat with margin expansion | Teradata looks undervalued relative to its peers – EV/EBITDA stays ~8×, P/E drops into the high‑teens. Could be a buying opportunity if you believe the company can sustain higher margins. |
Revenue beat but flat/declining EBITDA | Multiples creep up (EV/EBITDA ~9‑10×, P/E ~25‑30×). Still cheaper than Oracle’s P/E but the market may demand a higher premium for growth; watch cash‑flow generation and debt levels. |
One‑time charge or earnings miss | Short‑term multiples spike (EV/EBITDA > 10×, P/E > 50×), but the normalized valuation remains near 8‑9×. Consider whether the charge is truly non‑recurring before over‑reacting. |
Guidance signals sustained growth | Even a modest upward revision in FY‑2025 guidance (e.g., 10‑12 % revenue growth, 14‑15 % EBITDA margin) could nudge the market to re‑price the stock toward a 9‑10× EV/EBITDA range—still a value relative to Snowflake’s 70× and Oracle’s high P/E. |
Bottom line: Unless the Q2‑2025 results reveal a dramatic earnings collapse, Teradata’s EV/EBITDA is expected to remain in the low‑single‑digit range, making it the most “value‑oriented” of the three data‑platform peers. Its P/E will likely sit in the high‑teens to mid‑20s, comfortably below Oracle’s premium and only slightly above Snowflake’s growth‑adjusted level.
Next Steps for You
- Pull the complete earnings release (or the 10‑Q filing) after the August 5 conference call.
- Compute the exact EV/EBITDA and P/E using the formulas above.
- Compare the computed numbers to the baseline figures in the table, and adjust for any one‑time items disclosed in the footnotes.
- Incorporate the management guidance to derive forward multiples, then place Teradata on a valuation chart alongside Snowflake, Oracle, and the Azure proxy.
If you can share the actual revenue/EBITDA/net‑income numbers from the Q2‑2025 release, I can instantly recalculate the precise multiples and give you a more granular peer comparison. Happy analyzing!