11:37 AM EST, 11/05/2025 (MT Newswires) -- Teradata's ( TDC ) Q3 results are a step forward for the company, but it still needs to stabilize net expansion rates, set the "proper" expectations on Cloud annual recurring revenue growth, and drive sales of new solutions to ensure recurring revenue grows in 2026, Morgan Stanley analysts said in a Wednesday note.

Teradata ( TDC ) reported Q3 non-GAAP earnings of $0.72 per diluted share, ahead of $0.54 expected in a FactSet poll. Total revenue for the quarter was $416 million, compared with FactSet analyst expectations of $406.3 million.

Morgan Stanley raised the company's 2025 and 2026 EPS estimates to $2.39 and $2.49, respectively.

Analysts said the full impact of Teradata's ( TDC ) cost initiatives is yet to be seen, and therefore, operating expenses should fall further in 2026, setting up for a year of more notable operating margin expansion and stronger free cash flow growth.

Morgan Stanley increased the stock's price target to $30 from $28, and retained an overweight rating.

Teradata ( TDC ) shares were up 25% in recent Wednesday trading.

Price: 25.90, Change: +5.19, Percent Change: +25.06