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Why Teradata Corporation Shares Tumbled Today

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Teradata Corporation (NYSE: TDC  ) plunged 10% Thursday after the company released solid first-quarter results, but followed with weaker-than-expected guidance.

So what: Quarterly revenue came in at $628 million, which translated to earnings of $0.54 per share. Analysts, on average, had expected earnings of just $0.47 per share on sales of $614.6 million.

Teradata also expects full-year 2014 sales "at the lower end" of its previous $2.77 billion to $2.88 billion range, which should result in earnings per share of $2.85 to $3.00. Wall Street went into the report hoping for slightly higher 2014 earnings of $2.93 per share on sales of $2.83 billion.

Now what: The guidance miss wasn't that significant, so today's drop may well be an overreaction, and shares look admittedly cheap trading around 12 times next year's expected earnings. In the end, I think shares of Teradata look attractive right now from a long-term perspective.

Warren Buffett just bought nearly 9 million shares of this company
But that doesn't mean Teradata is the only promising bet for patient investors. Imagine a company, for example, that rents a very specific and valuable piece of machinery for $41,000... per hour. (That's almost as much as the average American makes in a year!) And Warren Buffett is so confident in this company's can't-live-without-it business model, he just loaded up on 8.8 million shares. An exclusive, brand-new Motley Fool report details this company that already has more than 50% market share. Just click HERE to discover more about this industry-leading stock... and join Buffett in his quest for a veritable landslide of profits!

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Steve Symington

Technology and consumer goods specialist for the Fool. Steve looks for responsible businesses which positively shape our lives. Then, he invests accordingly. Enjoy his work? Connect with him on Twitter & Facebook so you don't miss a thing.

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Related Tickers

9/1/2015 12:20 PM
TDC $28.91 Down -0.32 -1.09%
Teradata CAPS Rating: ****