Research HubSoftware & Cloud ServicesTERADATA CORP /DE/ (TDC)

Coverage:KVYO DDOG CRWD NOW SNOW PLTR ADBE CRM PANW NET SHOP MDB

SEC 10-K / 10-Q Equity ResearchSoftware & Cloud ServicesTicker: TDC

TERADATA CORP /DE/ (TDC) DCF Valuation & Fundamental Primer

TERADATA CORP /DE/ (TDC) currently trades at $30.50 with an enterprise value of $3.23B. Our proprietary institutional model rates TERADATA CORP /DE/ at 66/100 (Grade: B+ · Quality Software Operator). The current market price prices in an implied 5-year revenue CAGR of -2.5% vs. historical growth of -1.2% (Fairly Priced to Fundamentals).

GDA Quality Score

B+66/100

Quality Software Operator

Share Price / DCF Base

$30.50 / $32.34

Enterprise Value

$3.05B

TTM Revenue

$1.75B (+-1.2%)

Gross Margin

60.5%

Rule of 40 Score

14.6%

EV / TTM Revenue

1.7×

Structural Moat: Enterprise Software & Cloud Services Switching Costs & Recurring Workflow Integration

Key Growth Catalyst: AI workflow automation, multi-module expansion across enterprise cohorts, and operating margin leverage at Teradata Corporation.

Institutional fundamental teardown of Teradata Corporation (TDC) covering SEC 10-K/10-Q cash flow conversion, SBC dilution friction, and Reverse-DCF valuation hurdles.

Seed TDC in Interactive 3-Statement Model

Section 1 · Intrinsic Valuation Engine

TERADATA CORP /DE/ (TDC) 3-Scenario DCF Valuation Range

WACC: 10.0% · Terminal Growth: 2.5% · Diluted Shares: 95.0M

bear Case DCFSensitivity

$21.07

Implied Equity Value:$2.00B

vs Current ($30.50):-30.9%

base Case DCFPrimary Benchmark

$32.34

Implied Equity Value:$3.07B

vs Current ($30.50):+6.0%

bull Case DCFSensitivity

$43.25

Implied Equity Value:$4.11B

vs Current ($30.50):+41.8%

Interactive What-If DCF SandboxSim Rule of 40: 14.6%

Stress-test TDC's 5-year growth, target FCF margin, WACC, terminal methodology, and SBC/dilution friction in real time.

Seed Custom Drivers in /model

1-Click Regimes:

5Y Revenue CAGR-1.2%

2%Hist: -1.2%50%

Target FCF Margin15.8%

5%Base: 15.8%45%

WACC Discount Rate10.0%

6.5%Base: 10%14.5%

Terminal Growth (g)2.5%

1.0%Implies 13.7× Y5 FCF4.0%

Accounting Lens:

Simulated Implied Price$32.26

Spread vs Market+5.8%

Simulated EV$3.22B

Effective FCF Margin15.8%

Simulated 5-Year Cash Flow Trajectory (Unlevered FCF vs. Discounted PV)Cumulative 5Y PV: $1.01B

Year 1$1.73B

FCF:$273.2M

PV:$248.3M

Year 2$1.71B

FCF:$269.9M

PV:$223.1M

Year 3$1.69B

FCF:$266.7M

PV:$200.3M

Year 4$1.67B

FCF:$263.5M

PV:$180.0M

Year 5$1.65B

FCF:$260.3M

PV:$161.6M

Enterprise Value Composition Bridge$3.22B

Split between 5-Year Explicit Cash Flows and Discounted Terminal Value

5Y Explicit PV: $1.01B (31.4%)Terminal PV: $2.21B (68.6%)

(+) Balance Sheet Cash & Equivalents+$420.0M

(−) Total Debt Obligations−$576.0M

(=) Implied Equity Value (95.0M shs)$3.07B

2D Institutional Valuation Sensitivity Heatmap

Implied share price & upside/downside spread across 25 valuation states (Current Price: $30.50).

WACC \ Terminal	1.5%	2.0%	2.5%	3.0%	3.5%
8.5%	$35.85 +18%	$38.02 +25%	$40.55 +33%	$43.55 +43%	$47.14 +55%
9.3%	$32.27 +6%	$33.98 +11%	$35.95 +18%	$38.22 +25%	$40.90 +34%
10.0%	$29.33 -4%	$30.70 +1%	$32.26 +6%	$34.04 +12%	$36.10 +18%
10.8%	$26.86 -12%	$27.98 -8%	$29.24 -4%	$30.67 +1%	$32.29 +6%
11.5%	$24.76 -19%	$25.69 -16%	$26.73 -12%	$27.88 -9%	$29.19 -4%

Section 2 · Fundamental Underwriting

Institutional Software Quality Scorecard (66/100 · Grade B+)

Quality Software Operator

Solid software model with clear operating leverage, partially offset by standard SBC or moderate burn.

Cash Conversion25 / 25

Actual: 133% of EBITTarget: Target: ≥100%

Elite deferred revenue float; FCF exceeds operating income by >20%

Dilution Friction21 / 25

Actual: 6.8% of RevTarget: Target: ≤8%

Disciplined equity compensation well below software industry average

Unit Economics8 / 25

Actual: 60% GM / R40: 15%Target: Target: ≥75% GM / ≥40% R40

Sub-par gross margins; higher cost of delivery or hardware/services mix

Balance Sheet12 / 25

Actual: -$156.0M Net DebtTarget: Target: Net Cash > 0

Moderate leverage or cash burn; monitor liquidity runway

Core Investment Strengths & Moats

High-grade cash conversion: FCF is 133% of EBIT driven by upfront annual collections

Key Operational & Dilution Risks

Lower software gross margins (60.5%), indicating higher hosting or service delivery drag

Section 3 · Expectations Investing

Reverse-DCF Solver: What Growth is Priced Into TDC?

Fairly Priced to Fundamentals

Market implies -2.5% annual revenue growth over next 5 years (4.1% dilution-adjusted), in line with company run-rate.

Implied 5-Year Revenue CAGR

-2.5%

Required to justify $3.05B EV

Historical Run-Rate CAGR

-1.2%

Audited multi-year top-line trajectory

Growth Hurdle Spread

-1.3%

Implied hurdle minus historical growth

Implied FCF Margin @ Hist. Growth

15.0%

Steady-state FCF margin needed at current CAGR

Institutional Dilution-Adjusted Hurdle Lens

Headline Reverse-DCF ignores Stock-Based Compensation (6.8% of revenue) and annual share dilution (0.8%/yr). Accounting for both requires 4.1% 5-year revenue CAGR to justify $30.50/sh on a true per-share economic cash flow basis.

True Economic Hurdle4.1%

SBC & Dilution Hurdle Tax+6.5% / yr

Section 4 · 5-Year Forecast Schedule

TERADATA CORP /DE/ (TDC) 5-Year Fundamental Forecast

Customize in Live Engine

Statement Line Item	TTM Audited Base	TTM	Y1	Y2	Y3	Y4	Y5
Revenue	$1.75B	$1.75B	$1.73B	$1.71B	$1.69B	$1.67B	$1.65B
Gross Profit	$1.06B	$1.06B	$1.05B	$1.03B	$1.02B	$1.01B	$996.6M
Operating Income (EBIT)	$209.0M	$209.0M	$206.5M	$204.0M	$201.6M	$199.2M	$196.8M
Stock-Based Compensation (SBC)	$119.0M	$119.0M	$117.6M	$116.2M	$114.8M	$113.4M	$112.1M
Unlevered Free Cash Flow (FCF)	$277.0M	$277.0M	$273.7M	$270.5M	$267.3M	$264.1M	$260.9M
SBC-Adjusted True Cash Flow	$158.0M	$158.0M	$156.1M	$154.3M	$152.5M	$150.6M	$148.8M

Section 5 · Relative Valuation Multiples & Regression

Software & Cloud Services Peer Comparables & Rule of 40 Regression

Click any peer node or ticker to open its dedicated equity research report

Rule of 40 vs. EV / Revenue Multiple Regression

OLS Fit: EV/Rev = -6.2 + 0.36 × (Rule of 40) · R² = 66%

Stocks below the gold regression line trade at a discount relative to their Rule of 40 compounding efficiency.

TDC Actual vs. Reg. Multiple1.8× vs 2.0× fair

Reg.-Implied Share Price$35.18 (12.5% Discount)

TDCTERADATA CORP /DE/·Rule of 40: 14.6%·Actual EV/Rev: 1.8×·Regression Fair Multiple: 2.0×

12.5% Below Trendline (Attractive)Open TDC Report

Company	Ticker	Market Cap	TTM Revenue	Gross Margin	FCF Margin	Rule of 40	SBC % Rev	EV / Rev
TERADATA CORP /DE/	TDC	$2.90B	$1.75B	60.5%	15.8%	14.6%	6.8%	1.8×
ServiceNow	NOW	$152.61B	$10.98B	79.2%	31.1%	54.2%	15.9%	13.9×
Workday, Inc.	WDAY	$50.35B	$8.00B	75.0%	27.4%	43.9%	19.0%	6.4×
Salesforce	CRM	$217.10B	$37.90B	77.2%	32.8%	42.8%	8.4%	5.8×
Datadog	DDOG	$46.05B	$2.68B	80.8%	31.1%	57.7%	21.3%	17.4×
Snowflake Inc.	SNOW	$71.79B	$3.63B	66.5%	25.2%	57.7%	40.8%	20.0×
Hubspot	HUBS	$19.89B	$2.63B	85.0%	21.3%	52.7%	19.2%	7.7×
Peer Cohort Median Benchmark (N=6)				78.2%	29.2%	53.5%	19.1%	10.8×

Section 6 · Downside Protection & Multiple Sensitivity

EV / Revenue Multiple Compression Stress Test

Multiple Scenario	EV / Revenue	Implied Enterprise Value	Implied Equity Value	Implied Share Price	Delta vs Current
Current Multiple	1.7×	$3.05B	$2.90B	$30.50	0.0%
-20% Multiple Compression	1.4×	$2.44B	$2.29B	$24.07	-20.0%
-35% Multiple Compression	1.1×	$1.99B	$1.83B	$19.25	-35.0%
Software Baseline Floor (5.0× EV/Rev)	5.0×	$8.75B	$8.59B	$90.42	+186.4%

Section 7 · Investor Diligence FAQ

Frequently Asked Questions: TERADATA CORP /DE/ (TDC) Valuation

What is TERADATA CORP /DE/ (TDC)'s intrinsic DCF valuation and implied share price?

Based on audited SEC 10-K/10-Q filings and a 5-year 3-statement discounted cash flow (DCF) model, TERADATA CORP /DE/ (TDC) has a Base Case implied value of $32.34 per share (with a Bear Case of $21.07 and a Bull Case of $43.25), compared to its current price of $30.50. The model discounts projected free cash flows at a 10.0% WACC and a 2.5% terminal growth rate.

What is TERADATA CORP /DE/ (TDC)'s Rule of 40 score and Free Cash Flow margin?

TERADATA CORP /DE/ achieves a Rule of 40 score of 14.6%, combining a -1.2% revenue growth run-rate with a 15.8% TTM free cash flow margin on $1.75B in trailing twelve-month revenue. In the Software & Cloud Services peer cohort, the median Rule of 40 benchmark is 53.5%.

What revenue growth rate is priced into TDC stock according to Reverse-DCF analysis?

At $30.50 per share (Enterprise Value of $3.05B), our Reverse-DCF solver indicates the market is pricing in a 5-year implied revenue CAGR of -2.5%, compared to TERADATA CORP /DE/'s historical CAGR of -1.2%. Overall market expectations are rated as "Fairly Priced to Fundamentals".

How does TERADATA CORP /DE/ compare to Software & Cloud Services software peers?

TERADATA CORP /DE/ (TDC) earns an institutional Software Quality Score of 66/100 (Grade B+ — Quality Software Operator). Across its Software & Cloud Services peer group (NOW, WDAY, CRM, DDOG, SNOW), the cohort trades at a median EV/TTM Revenue multiple of 10.8× and a median gross margin of 78.2%.

How does Stock-Based Compensation (SBC) impact TERADATA CORP /DE/ (TDC)'s valuation?

TERADATA CORP /DE/ recorded $119.0M in TTM stock-based compensation (6.8% of revenue). When treating SBC as a cash-equivalent compensation expense, TERADATA CORP /DE/'s SBC-adjusted free cash flow yield is 5.5%, scoring 21/25 on our Shareholder Dilution Friction pillar.

TERADATA CORP /DE/ (TDC) DCF Valuation & Fundamental Primer

WACC \ Terminal

1.5%

2.0%

2.5%

3.0%

3.5%

8.5%

$35.85

+18%

$38.02

+25%

$40.55

+33%

$43.55

+43%

$47.14

+55%

9.3%

$32.27

+6%

$33.98

+11%

$35.95

+18%

$38.22

+25%

$40.90

+34%

10.0%

$29.33

-4%

$30.70

+1%

$32.26

+6%

$34.04

+12%

$36.10

+18%

10.8%

$26.86

-12%

$27.98

-8%

$29.24

-4%

$30.67

+1%

$32.29

+6%

11.5%

$24.76

-19%

$25.69

-16%

$26.73

-12%

$27.88

-9%

$29.19

-4%

Statement Line Item

TTM Audited Base

TTM

Revenue

$1.75B

$1.73B

$1.71B

$1.69B

$1.67B

$1.65B

Gross Profit

$1.06B

$1.05B

$1.03B

$1.02B

$1.01B

$996.6M

Operating Income (EBIT)

$209.0M

$206.5M

$204.0M

$201.6M

$199.2M

$196.8M

Stock-Based Compensation (SBC)

$119.0M

$117.6M

$116.2M

$114.8M

$113.4M

$112.1M

Unlevered Free Cash Flow (FCF)

$277.0M

$273.7M

$270.5M

$267.3M

$264.1M

$260.9M

SBC-Adjusted True Cash Flow

$158.0M

$156.1M

$154.3M

$152.5M

$150.6M

$148.8M

Company

Ticker

Market Cap

TTM Revenue

Gross Margin

FCF Margin

Rule of 40

SBC % Rev

EV / Rev

TERADATA CORP /DE/

TDC

$2.90B

$1.75B

60.5%

15.8%

14.6%

6.8%

1.8×

ServiceNow

NOW

$152.61B

$10.98B

79.2%

31.1%

54.2%

15.9%

13.9×

Workday, Inc.

WDAY

$50.35B

$8.00B

75.0%

27.4%

43.9%

19.0%

6.4×

Salesforce

CRM

$217.10B

$37.90B

77.2%

32.8%

42.8%

8.4%

5.8×

Datadog

DDOG

$46.05B

$2.68B

80.8%

31.1%

57.7%

21.3%

17.4×

Snowflake Inc.

SNOW

$71.79B

$3.63B

66.5%

25.2%

57.7%

40.8%

20.0×

Hubspot

HUBS

$19.89B

$2.63B

85.0%

21.3%

52.7%

19.2%

7.7×

Peer Cohort Median Benchmark (N=6)

78.2%

29.2%

53.5%

19.1%

10.8×

Multiple Scenario

EV / Revenue

Implied Enterprise Value

Implied Equity Value

Implied Share Price

Delta vs Current

Current Multiple

1.7×

$3.05B

$2.90B

$30.50

0.0%

-20% Multiple Compression

1.4×

$2.44B

$2.29B

$24.07

-20.0%

-35% Multiple Compression

1.1×

$1.99B

$1.83B

$19.25

-35.0%

Software Baseline Floor (5.0× EV/Rev)

5.0×

$8.75B

$8.59B

$90.42

+186.4%

TERADATA CORP /DE/ (TDC) 3-Scenario DCF Valuation Range

2D Institutional Valuation Sensitivity Heatmap

Institutional Software Quality Scorecard (66/100 · Grade B+)

Core Investment Strengths & Moats

Key Operational & Dilution Risks

Reverse-DCF Solver: What Growth is Priced Into TDC?

TERADATA CORP /DE/ (TDC) 5-Year Fundamental Forecast

Software & Cloud Services Peer Comparables & Rule of 40 Regression

Rule of 40 vs. EV / Revenue Multiple Regression

EV / Revenue Multiple Compression Stress Test

Frequently Asked Questions: TERADATA CORP /DE/ (TDC) Valuation

What is TERADATA CORP /DE/ (TDC)'s intrinsic DCF valuation and implied share price?

What is TERADATA CORP /DE/ (TDC)'s Rule of 40 score and Free Cash Flow margin?

What revenue growth rate is priced into TDC stock according to Reverse-DCF analysis?

How does TERADATA CORP /DE/ compare to Software & Cloud Services software peers?

How does Stock-Based Compensation (SBC) impact TERADATA CORP /DE/ (TDC)'s valuation?

Related Software & Cloud Services Equity Research Reports

TERADATA CORP /DE/ (TDC) 3-Scenario DCF Valuation Range

2D Institutional Valuation Sensitivity Heatmap

Institutional Software Quality Scorecard (66/100 · Grade B+)

Core Investment Strengths & Moats

Key Operational & Dilution Risks

Reverse-DCF Solver: What Growth is Priced Into TDC?

TERADATA CORP /DE/ (TDC) 5-Year Fundamental Forecast

Software & Cloud Services Peer Comparables & Rule of 40 Regression

Rule of 40 vs. EV / Revenue Multiple Regression

EV / Revenue Multiple Compression Stress Test

Frequently Asked Questions: TERADATA CORP /DE/ (TDC) Valuation

What is TERADATA CORP /DE/ (TDC)'s intrinsic DCF valuation and implied share price?

What is TERADATA CORP /DE/ (TDC)'s Rule of 40 score and Free Cash Flow margin?

What revenue growth rate is priced into TDC stock according to Reverse-DCF analysis?

How does TERADATA CORP /DE/ compare to Software & Cloud Services software peers?

How does Stock-Based Compensation (SBC) impact TERADATA CORP /DE/ (TDC)'s valuation?

Related Software & Cloud Services Equity Research Reports