Why shares of Teradata Corporation (TDC) stock are rising in premarket trading?

Teradata (TDC), an enterprise software company that specializes in commercializing database analytics and higher convenience in scalability, pre-announced better-than-expected financial results for the quarter of March. The company is striving to make progress on its push to transition more of its business to the cloud. TDC stock surged adjacent to the news.


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Teradata Corporation (TDC) shares were rising 1.58% to trade at $51.3 in premarket at last check. TDC’s stock closed the last session at $50.50, increasing 26.63% or $10.62. For the last six months, the stock has gained a total of 138.43%, and over the last three months, the stock has increased by 94.46%. The price range of the company’s shares was between $48.88 and $53.99.

About Teradata.

Teradata showed an immense acceleration in its growing public cloud business, which surged in recurring revenue by 165% compared to the year-ago quarter. Distinctive competency Teradata has over its peers consists of its ability to take full advantage of technological advances.

However, Teradata’s fourth-quarter revenue dropped by 1% compared to year-earlier levels., The reason for the plummet was due to the company shifting towards a recurring revenue model. Revenue generated from consulting services, equipment sales, and sales of software licenses decreased immensely, however recurring revenue climbed by 9% year over year. Full-year of 2020 saw a 7% increase in recurring revenue yet a 3% overall top-line decline.

Teradata is now predicted for Earning per share between $0.67 and $0.69, compared to its previous forecast which accounted for $0.38 to $0.40. The company has predicted for the public cloud ARR growth yearly value to soar from $16 million to $18 million in the quarter. Previously, management was expecting its Teradata Vantage cloud contracts to increase from $10 million to $15 million during the period.

RBC Capital analyst Matthew Hedberg analysis surged his1-Year price target for the stock from $27 to $45 after stating that the company growth has increased on a sequential basis. Furthermore, TDC announced that revenue in the quarter could be compared to the $491 million reported in the 2020 fourth quarter, which was above estimates by wall street analysts.

Conclusion:

TDC stock soared immensely after announcing their preliminary financial results. TDC offered a better-than-expected outlook for the current quarter, and are anticipated to produce a decent revenue, beating wall street analyst. This induced further investor interest for the company with a share price currently at $51.3 at the last check.

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