TELEDYNE TECHNOLOGIES INC (TDY): what the price assumes

In the published model solve dated 2026-Q2, anchored at $621.96, TELEDYNE TECHNOLOGIES INC (TDY) is priced for +21.7% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-07-11.

Generated: 2026-08-30 · Exported: 2026-08-31 · Source: https://boothcheck.com/report/TDY

Headline

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

The operating-margin figure is value-band context at year 12: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

Solve inputs: computed at a 9% cost of capital with 4% terminal growth over a 5-year stage.

How unusual the bet is: within-range (limited comparison data)

Valuation X-Ray

Asset, earnings-power and peer-multiple models all land far below the price; ONLY the growth-DCF reaches it. The bet is durable compounding the static frames structurally cannot price (a moat/durability premium).

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Families that justify the price: Growth Families that call it expensive: Asset, Earnings, Relative

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.7%); the inversion above states its own rate.

Per-Model Detail (n=15)

Economic-Unit Decomposition (Sum Of The Parts)

One or more material disclosed units has unresolved economics. Unknown/general is not evidence of homogeneity: segment SOTP is primary but incomplete, consolidated cash flow may remain only a secondary cross-check when every unit shares an enterprise basis, and one sector multiple or target margin is withheld.

No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.

Solvency

Bullet Takeaways

• Teledyne is a diversified technology conglomerate spanning four segments (Digital Imaging, Instrumentation, Aerospace and Defense Electronics, and Engineered Systems), with digital imaging the largest at $816.9 million of Q1 2026 sales and a book-to-bill of 1.38.
• The biggest issue is price, not business quality: no valuation method reaches the current $634.31, and the stock trades at the very top of its aerospace-and-defense peer distribution.
• Watch the acquisition engine: leverage is at a five-year low, funding a tuck-in and mid-sized deal strategy, and management raised full-year 2026 non-GAAP EPS guidance to $23.85 to $24.15.

Bull Case

The bull case has to reckon with where the price sits relative to the methods, because that gap is unusually wide and it is the reason the stock is not obviously a buy at any price the models endorse. Every valuation family reads Teledyne as rich, and that spread is precisely what a durable serial compounder commands: investors have watched this management team buy niche technology businesses, integrate them, and grow the whole for years, and they pay up for the track record rather than the trailing multiple. The quality underneath is real. Gross margin holds steady above 42%, operating margin runs near 19%, free cash flow converts at 113% of net income, and the Altman score of 4.96 sits comfortably in safe territory.

The portfolio is the moat. Teledyne's four segments serve defense electronics, space and infrared imaging, instrumentation, and engineered systems, markets where the company holds specialized, often sole-supplier positions rather than commodity share. Digital Imaging, the largest segment, posted a book-to-bill of 1.38 in Q1 2026, meaning orders are running well ahead of sales, a leading indicator of growth. The visibility extends further out: the FY2025 10-K reports remaining performance obligations (contracted backlog) of "$4,611.7 million" as of December 28, 2025, with about 71% expected to convert to revenue within a year. That is a large, visible base of future revenue.

The capital engine is running with room to spare. Q1 2026 delivered record net sales of $1.56 billion up 7.6%, and management raised full-year non-GAAP EPS guidance to $23.85 to $24.15, citing organic growth in digital imaging, infrared systems for space and defense, and recent acquisitions. Leverage reached a five-year low, giving the company significant firepower for its tuck-in and mid-sized acquisition strategy, and it bought back $405.8 million of stock over the trailing year. The bull case is that the compounding machine keeps working, and the premium the methods flag is simply what the market pays for a proven capital allocator with a deep, defensible portfolio.

Bear Case

The bear case begins with the markets Teledyne sells into, because several of them are being reshaped by faster-moving competitors and cyclical forces the company does not control. The FY2025 10-K is explicit that it sells "in markets that are cyclical in nature and a downturn in one or more of these markets could materially impact our financial results", spanning defense electronics, instrumentation, digital imaging, energy exploration, commercial aviation, and semiconductors. Digital imaging and sensor technology in particular is an arena where semiconductor-scale players and specialized rivals invest heavily; a conglomerate spread across four segments cannot out-spend focused competitors in every niche it occupies, and the risk is gradual share erosion in the segments where the technology moves fastest.

The acquisition strategy that drives the growth also carries the disruption risk inward. The 10-K cautions that acquisitions "involve various inherent risks, such as, among others, our ability to integrate acquired businesses, retain key management" and realize expected value. A roll-up of niche technology businesses is only as good as its ability to keep those businesses competitive after purchase, and the more the underlying markets get disrupted, the harder integration and retention become. Teledyne has executed well historically, but the model depends on continuously finding and absorbing targets faster than its existing portfolio ages, and the 10-K itself provides "no assurance as to when, if or on what terms any acquisitions will be made".

The valuation removes any cushion for these risks to play out. No valuation family reaches the price: the stock is rich on assets, on earnings power, on peer multiples, and even on the forward-growth method, and its multiple sits at the very top of the aerospace-and-defense peer distribution, well beyond the upper quartile. The market is paying about 28x company-wide operating income and, in effect, assuming Teledyne holds near-peak growth for roughly five more years, a persistence only about 29% of comparable fast-growers have achieved. When the price is a bet beyond what any standard frame supports, even modest disappointment in one large segment, or a stretch without an accretive deal, can compress both the earnings and the premium multiple at once.

Valuation

The defining fact about Teledyne's valuation is that no method reaches the price. At $634.31 (July 11, 2026), the asset-based lens, the earnings-power lens, the peer-multiple lens, and even the forward-growth method all land below the price, the first two by more than three times. That configuration is rare and it is the whole finding: the market is paying a premium that no standard frame supports, and the multiple sits at the very top of the aerospace-and-defense peer distribution, well beyond the upper quartile. The spread is the price of the market's confidence in the serial-compounder model, not a number any model produces.

Inverting the price says the same thing from the other side. The market is paying about 28x company-wide operating income and, effectively, assuming Teledyne sustains growth near its self-funding ceiling for roughly five years. The margin requirement is not the issue, the business only has to hold a fraction of the roughly 19% operating margin it earns today, so the demand is on duration and continued execution, not on margin expansion. The backlog gives that assumption some real support: the FY2025 10-K reports remaining performance obligations of "$4,611.7 million" with about 71% converting within a year, and the digital-imaging book-to-bill of 1.38 points to continued order strength. But contracted backlog covers roughly a year, not the five the price assumes.

Solvency is a strength and it is what funds the model. Leverage is moderate and well covered, debt-to-equity is 0.27, and management noted leverage reached a five-year low, giving significant room for the tuck-in and mid-sized acquisitions that drive the growth. Free cash flow converts above net income and the company repurchased $405.8 million of stock over the trailing year. The valuation therefore does not rest on any survival or balance-sheet question; it rests entirely on whether Teledyne keeps executing the acquire-integrate-compound playbook at a pace that justifies a price the methods say is already beyond them. The business is excellent; the price assumes the excellence continues without interruption.

Catalysts

Q1 2026, reported April 22, was a record-and-raise quarter. Teledyne posted record net sales of $1.56 billion, up 7.6% year over year, with GAAP diluted EPS of $4.85 (up 20.3% from $3.99) and non-GAAP EPS of $5.80 ahead of expectations. Digital Imaging, the largest segment, generated $816.9 million in sales up 7.9% with $141.7 million of operating income and a book-to-bill ratio of 1.38, a strong forward demand signal. Recent acquisitions added $33.3 million of incremental sales in the quarter.

Management raised full-year 2026 guidance, lifting GAAP diluted EPS to $20.08 to $20.44 and non-GAAP diluted EPS to $23.85 to $24.15, citing organic growth in digital imaging, infrared systems for space and defense applications, and acquisition contributions. The strategic story is the balance-sheet capacity: leverage reached a five-year low, positioning the company for tuck-in and mid-sized acquisitions. The items to watch are the pace and size of new deals given that firepower, whether the digital-imaging book-to-bill stays above 1.0 as a growth indicator, defense and space demand trends that feed the infrared and electronics segments, and conversion of the roughly $4.6 billion contracted backlog. The next quarterly report is the immediate checkpoint on execution against the raised guidance.

Peer Cohorts (Per Segment, With Filing Citations)

Digital Imaging (reported)

• CGNX (Cognex Corporation)
• FY2025 10-K: …package. Vision Systems and Sensors Vision systems combine smart cameras and software to perform a wide range of tasks, including part location, identification, measurement, assembly verification, and robotic guidance. Vision sensors can deliver an easy-to-use, low-cost, reliable solution for simple pass/fail…
• FY2025 10-K: …growth in the packaging market will be driven by increasingly stringent regulations around traceability, quality, and compliance, making machine vision solutions valuable for manufacturers. We believe these regulatory requirements are accelerating the adoption of advanced inspection technologies to help ensure…
• OSIS (OSI SYSTEMS, INC.)
• FY2025 10-K: …product quality, timely delivery, pricing, technical support, and the ability to offer fully integrated services that span application development and design through to production. Because our custom optoelectronic components and subsystems require a high degree of engineering expertise, there are very few…
• FY2025 10-K: …present attractive competitive dynamics. We intend to achieve this strategy through internal growth and through selective acquisitions. Acquiring New Technologies and Companies. Our success depends in part on our ability to continually enhance and broaden our product offerings in response to changing technologies,…
• ZBRA (ZEBRA TECHNOLOGIES CORPORATION)
• FY2025 10-K: …to end customers. We also expect to drive growth by capitalizing on technology transitions occurring in the industry, including transitions to WiFi 7, the 5th generation mobile network (5G) and Android™ operating system in mobile computing and transitions in data capture to technologies involving 2D and 3D imaging…
• FY2025 10-K: …eco-packaging and sustainable product design. Additionally, we have science-based targets for carbon emission reductions in Zebra's operations and throughout our value chain. 8 Table of Contents Competition We operate in a highly competitive environment. The need for companies to improve productivity and implement…

Instrumentation (reported)

• KEYS (KEYSIGHT TECHNOLOGIES, INC.)
• FY2025 10-K: …aerospace, defense, and satellite equipment prime contractors, subcontractors, and related component suppliers. Government customers include a range of government agencies, such as departments and ministries of defense, security agencies, and related government research entities. Our customers need to accelerate the…
• FY2025 10-K: …to design and measurement to enable realization of the design in the fab along with efficient testing at scale to preserve and enhance yield. Our semiconductor customers are primarily design and production teams in semiconductor and semiconductor capital equipment companies who are looking to differentiate their…
• A (AGILENT TECHNOLOGIES, INC.)
• FY2025 10-K: …provides an extensive services and consumables portfolio that spans the entire lab, in addition to software and laboratory automation solutions, which are designed to improve customer outcomes and represents a broad range of offerings designed to serve customer needs across end-markets and applications. Our services…
• FY2025 10-K: …automation offers automated sample preparation solutions, including liquid handling, plate management, consumables and scheduling software. These solutions range from standalone automation platforms to integrated workflow solutions with seamless integration to our instrumentation. Our Applied Markets segment provides…
• MKSI (MKS INC)
• FY2025 10-K: …guidance and control for manufacturing processes. In connection with the Atotech Acquisition (as defined below), we introduced an extension of the Surround the Workpiece offering called Optimize the Interconnect®, which refers to MKS' combined laser drilling and chemistry solutions geared towards accelerating…
• FY2025 10-K: 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as soon as reasonably practicable after we electronically file such materials with, or furnish them to, the SEC. Markets and Applications Since our inception, we have focused on satisfying the needs of our customers by establishing…
• MTD (Mettler-Toledo International Inc.)
• FY2025 10-K: …capabilities enable improved asset management solutions for our customers to reduce process downtime and maintenance costs. Our instruments offer leading multi-parameter capabilities and plant-wide control system integration, which are key for integrated measurement of multiple parameters to secure production quality…
• FY2025 10-K: …development to complement our products and provide complete solutions to our customers. • cost reductions, which reduce the manufacturing cost of our products through better overall design and/or improve the ease of serviceability. We devote a substantial proportion of our research and development budget to software…
• FTV (Fortive Corp)
• FY2025 10-K: …Our Intelligent Operating Solutions segment provides advanced instrumentation, software and services to tens of thousands of customers enabling their mission-critical workflows. These offerings include professional instruments used in applications including maintenance, repair, measurement and condition monitoring,…
• FY2025 10-K: …and services in our Advanced Healthcare Solutions segment are marketed under a variety of brands, including ADVANCED STERILIZATION PRODUCTS "ASP", CENSIS, FLUKE BIOMEDICAL, LANDAUER, and PROVATION. ************************************ The following discussion includes information common to all of our segments.…
• NOVT (NOVANTA INC.)
• FY2025 10-K: …and markets a range of medical grade technologies, including medical insufflators and endoscopic pumps and related disposables, imaging, identification and RFID solutions, advanced motion control solutions, light engines, and integrated operating room technologies. The vast majority of the segment's product offerings…
• FY2025 10-K: …related reasons. Products offered by our Automation Enabling Technologies segment are manufactured at facilities in Apex, North Carolina; Bedford, Massachusetts; Marlborough, Connecticut; Mukilteo, Washington; Rocklin, California; Suzhou, China; and Taunton and Manchester, United Kingdom. Products offered by our…

Aerospace and Defense Electronics (reported)

• HEI (HEICO CORPORATION)
• FY2025 10-K: …misappropriation or obsolescence from occurring by developing new techniques and improving existing methods and processes, which we will continue on an ongoing basis as dictated by the technological needs of our business. We believe that, based on our competitive pricing, reputation for high quality, short lead time…
• FY2025 10-K: …which we design and manufacture for this market, a market that includes commercial satellites. Our customers for these products include satellite and spacecraft manufacturers. Electromagnetic Interference (EMI) and Radio-Frequency Interference (RFI) Shielding and Suppression Filters . The ETG designs and manufactures…
• TDG (TransDigm Group Incorporated)
• FY2025 10-K: …following table sets forth, for the periods indicated, certain financial information by reportable segment, which includes a reconciliation of EBITDA As Defined to consolidated income from continuing operations before income taxes (in millions): Fiscal Year Ended September 30, 2025 Power & Control Airframe…
• FY2025 10-K: …handling, delivery systems and electronic components used in the generation, amplification, transmission and reception of microwave signals. Primary customers of this segment are engine and power system and subsystem suppliers, airlines, third party maintenance suppliers, military buying agencies and repair depots.…
• MRCY (MERCURY SYSTEMS, INC.)
• FY2025 10-K: …our portfolio of embedded security products that can be leveraged across our business. We believe there are a number of evolving trends that are reshaping our target markets and accordingly provide us with attractive growth opportunities. These trends include: • The aerospace and defense electronics market is…
• FY2025 10-K: …by the growing demand for domestically designed, sourced and manufactured electronics for critical aerospace, defense and intelligence applications. Our primary market positioning is centered on making commercially available technologies profoundly more accessible to the aerospace and defense sector, specifically as…
• CW (CURTISS-WRIGHT CORPORATION)
• FY2025 10-K: …avionics and electronics, flight test equipment, and aircraft data management solutions. The Naval & Power reportable segment is comprised of businesses that primarily provide products to the naval defense and power & process markets, and to a lesser extent, the aerospace defense markets. The products offered include…
• FY2025 10-K: …The commercial aerospace business is primarily impacted by OEM production rates of new aircraft, while the defense business is primarily impacted by government funding and spending on new programs, primarily driven by the U.S. Government. Certain industrial businesses within our Aerospace & Industrial segment are…
• LHX (L3HARRIS TECHNOLOGIES, INC.)
• FY2025 10-K: …Group . On May 31, 2024, we completed the divestiture of our Antenna disposal group, from our SAS segment, for cash proceeds of $ 170 million and a $ 25 million note receivable. Visual Information Solutions ("VIS"). During fiscal 2023, we completed the divestiture of VIS from our SAS segment , for net cash proceeds…
• FY2025 10-K: …property damage to us or third parties could also occur. The use of these products in applications by our customers could also result in liability if an explosion, unplanned ignition or fire were to occur. Extensive regulations apply to the handling of explosive and energetic materials, including but not limited to,…

Engineered Systems (reported)

• LDOS (Leidos Holdings, Inc.)
• FY2025 10-K: …or networks or those of our customers, impair our ability to provide services to our customers and may jeopardize the security of data collected, stored, transmitted or otherwise processed through our information technology infrastructure, systems and networks. As a result, we could be exposed to claims, fines,…
• FY2025 10-K: …of control to the customer is evidenced by clauses in the contract that allow the customer to unilaterally terminate the contract for convenience, pay for costs incurred plus a reasonable profit and take control of any work-in-process. Similarly, for non-U.S. government contracts, the customer typically controls the…
• SAIC (Science Applications International Corporation)
• FY2025 10-K: …development and integration services, training, logistics and sustainment. These full life cycle offerings, combined with deep customer knowledge, allow us to more effectively support our customers' missions. Significant Scale and Diversified Contract Base. With approximately $7.5 billion in revenue in fiscal 2025,…
• FY2025 10-K: …the customer simultaneously receives and consumes the benefits of the Company's performance as services are provided. Alternatively, performance obligations satisfied over time may involve the completion of a contract deliverable. Examples include systems integration, network engineering, network design, and…
• CACI (CACI International Inc)
• FY2025 10-K: …needs. Our proven Expertise and Technology and strong record of program delivery have enabled us to compete for and secure new customers and contracts, win repeat business, and build and maintain long-term customer relationships. We seek competitive business opportunities and have built our operations to support…
• FY2025 10-K: …in a highly competitive industry that includes many firms, some of which are larger in size and have greater financial resources than we do. We obtain much of our business on the basis of proposals submitted in response to requests from potential and current customers, who may also receive proposals from other firms.…
• BAH (BOOZ ALLEN HAMILTON HOLDING CORPORATION)
• FY2025 10-K: …appropriately qualified personnel or failure to timely and effectively deploy such additional personnel against funded backlog could negatively affect our ability to grow our revenue. We may also not recognize revenue on funded backlog due to, among other reasons, the tardy submissions of invoices by our…
• FY2025 10-K: …support systems and provide services that include managing and protecting information involved in intelligence, national security, and other sensitive government functions. Our systems also store, process, and transmit sensitive Company and government and commercial customer information, including personally…
• KTOS (Kratos Defense & Security Solutions, Inc.)
• FY2025 10-K: …property and past performance qualifications and by offering a wider range of comprehensive low-cost technology leading and proven products and solutions compared to our competitors. In regard to areas of specialization, our product and solution offerings include the manufacturing of specialized defense electronics;…
• FY2025 10-K: …address these threats for and with our customers and partners is recognized in the industry. We believe that the Company's military grade hardware, software and solution offerings, including jet unmanned aerial drones, rocket and hypersonic systems, C5ISR and air defense systems, jet engine and propulsion systems for…
• BWXT (BWX Technologies Inc)
• FY2025 10-K: …in this Report for financial information on our equity method investments. At December 31, 2025, our ending backlog was $7,260.7 million, which included $2,151.3 million of unfunded backlog related to U.S. Government contracts. We expect to recognize approximately 40% of the revenue associated with our backlog by the…
• FY2025 10-K: AccumulatedOtherComprehensiveIncomeMember us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetPriorServiceCostCreditMember 2024-01-01 2024-12-31 0001486957 us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetPriorServiceCostCreditMember 2023-01-01…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.