Stephen McMillan, President and CEO of Teradata Corp (NYSE:TDC), recently sold 20,000 shares of the company's common stock. The shares were sold at a weighted average price of $30.0043, resulting in a total transaction value of $600,086. This sale was conducted as part of a pre-arranged trading plan under Rule 10b5-1, which McMillan adopted on February 23, 2024.
Following this transaction, McMillan retains direct ownership of 373,579 shares in the company. The shares were sold in multiple trades, with prices ranging from $30.00 to $30.03.
In other recent news, Teradata Corporation (NYSE:TDC) reported a 26% year-over-year increase in its cloud Annual Recurring Revenue (ARR), surpassing the $0.5 billion mark during its third-quarter earnings for 2024. Despite this growth, the company revised its cloud ARR growth outlook for 2024 to 18%-22%, due to shifts in customer migration strategies. Teradata also announced robust profitability, with non-GAAP earnings per share of $0.69 and a free cash flow of $69 million.
In further developments, Teradata has undergone strategic leadership changes and established new partnerships aimed at fostering continued growth and innovation. The company anticipates a cloud ARR growth of 18%-22% for 2024 and remains committed to returning at least 75% of free cash flow to shareholders. Management expects a stable gross margin profile and a strong pipeline of customer commitments.
However, the company acknowledged some challenges in transitioning AI projects from proof-of-concept to production and a decline in the cloud net expansion rate to 120%, particularly impacted by the healthcare sector and Europe. Despite these issues, Teradata has reported significant improvements in operating margin and free cash flow. The company also highlighted notable customer wins, including a major U.S. insurance company and an Asia-Pacific bank.
InvestingPro Insights
While Stephen McMillan's recent sale of Teradata Corp (NYSE:TDC) shares may raise eyebrows, it's essential to consider the broader financial context of the company. According to InvestingPro data, Teradata's market capitalization stands at $2.86 billion, with a P/E ratio of 35.31, suggesting a relatively high valuation compared to earnings.
Interestingly, one InvestingPro Tip highlights that management has been aggressively buying back shares, which could be seen as a vote of confidence in the company's future prospects. This buyback activity aligns with another InvestingPro Tip indicating a high shareholder yield, potentially offsetting concerns about the CEO's stock sale.
Despite the recent 11.8% drop in share price over the past week, Teradata has shown strong performance over a longer timeframe, with a 16.68% price return over the last three months. This volatility underscores the importance of considering multiple factors when evaluating the significance of insider transactions.
For investors seeking a more comprehensive analysis, InvestingPro offers 14 additional tips for Teradata, providing a deeper understanding of the company's financial health and market position.
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