Munger Mode rating: 3 out of 5 — Hold. Our own rating from the research report below, on business quality first: moat durability and management, with price separating the top three.
Warren here, with Charlie's ghost at my shoulder keeping me honest. Teradyne is one of two companies on Earth that can reliably tell a chipmaker whether the most complex objects humanity has ever manufactured actually work. That's a wonderful franchise — a genuine duopoly with switching costs measured in decades. The company just printed the best quarter in its 66-year history: revenue of $1.33 billion in the June quarter, up 104% year over year, with GAAP operating margins near 33% and a balance sheet carrying zero debt. And yet we arrive at a hold, not a buy. The market is paying roughly 49 times trailing earnings and about 41 times this year's likely peak-cycle earnings for a business whose revenue fell 28% peak-to-trough as recently as 2021–2023.
Recent filings analysed: 8-K (2026-08-10), 10-Q (2026-07-31), 8-K (2026-07-29), 8-K (2026-05-11).
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