In the rapidly evolving world of technology, Zscaler, Inc. and Teradata Corporation stand out as prominent players in the software infrastructure industry. Both companies focus on cloud-based solutions but cater to different aspects of enterprise needs—Zscaler in cloud security and Teradata in multi-cloud data analytics. This comparison explores their innovation strategies and market positions to help you decide which stock might best enhance your investment portfolio. Let’s uncover which company offers the most compelling opportunity for investors today.
Table of contents
Companies Overview
I will begin the comparison between Zscaler and Teradata by providing an overview of these two companies and their main differences.
Zscaler Overview
Zscaler, Inc. is a cloud security company that offers solutions for secure access to externally managed applications and internally hosted applications across data centers and clouds. Its services include digital experience monitoring and workload segmentation to reduce risk and prevent breaches. Headquartered in San Jose, California, Zscaler serves various industries including financial services, healthcare, and technology, positioning itself as a leader in cloud infrastructure security.
Teradata Overview
Teradata Corporation provides a connected multi-cloud data platform designed for enterprise analytics, enabling clients to integrate data sources and simplify ecosystems. Its offerings include the Teradata Vantage platform and business consulting services to support cloud migration and data strategy. Based in San Diego, California, Teradata serves sectors such as government, retail, and telecommunications through a global direct sales force focused on analytic value delivery.
Key similarities and differences
Both Zscaler and Teradata operate in the software infrastructure industry, focusing on cloud-based solutions for enterprise clients. Zscaler specializes in cloud security and workload segmentation, while Teradata emphasizes multi-cloud data analytics and consulting services. Each targets a broad range of industries but differs in core offerings: Zscaler provides security access and threat prevention, whereas Teradata centers on data platform integration and analytic infrastructure support.
Income Statement Comparison
This table presents a side-by-side comparison of key income statement metrics for Zscaler, Inc. and Teradata Corporation for their most recent fiscal years.
| Metric | Zscaler, Inc. (ZS) | Teradata Corporation (TDC) |
|---|---|---|
| Market Cap | 34.1B | 2.8B |
| Revenue | 2.67B | 1.75B |
| EBITDA | 112M | 293M |
| EBIT | -8.8M | 193M |
| Net Income | -41.5M | 114M |
| EPS | -0.27 | 1.18 |
| Fiscal Year | 2025 | 2024 |
Income Statement Interpretations
Zscaler, Inc.
Zscaler’s revenue surged from 673M in 2021 to 2.67B in 2025, reflecting strong growth. Net income remains negative but improved substantially from -262M in 2021 to -41M in 2025. Gross margins stayed high at 76.87%, yet EBIT and net margins were negative, though showing notable margin growth and earnings improvement in 2025.
Teradata Corporation
Teradata’s revenue declined slightly from 1.92B in 2021 to 1.75B in 2024, with net income fluctuating and ending at 114M in 2024. Margins are positive and stable, with a 60.46% gross margin and an 11.03% EBIT margin. Despite a recent revenue dip, net margin and EPS growth were strong in the latest year, indicating operational improvements.
Which one has the stronger fundamentals?
Zscaler demonstrates robust revenue and earnings growth with high gross margins but continues to report net losses, indicating ongoing investment. Teradata shows stable profitability with positive net income and margins, though revenues slightly declined over the period. Both have favorable outlooks, but Zscaler’s rapid growth contrasts with Teradata’s steady profitability.
Financial Ratios Comparison
The table below presents a selection of key financial ratios for Zscaler, Inc. and Teradata Corporation based on their most recent fiscal year data, illustrating their financial performance and position.
| Ratios | Zscaler, Inc. (ZS) FY 2025 | Teradata Corporation (TDC) FY 2024 |
|---|---|---|
| ROE | -2.31% | 85.71% |
| ROIC | -3.18% | 16.89% |
| P/E | -1063 | 26.34 |
| P/B | 24.51 | 22.58 |
| Current Ratio | 2.01 | 0.81 |
| Quick Ratio | 2.01 | 0.79 |
| D/E | 1.00 | 4.33 |
| Debt-to-Assets | 27.98% | 33.80% |
| Interest Coverage | -13.49 | 7.21 |
| Asset Turnover | 0.42 | 1.03 |
| Fixed Asset Turnover | 4.22 | 9.07 |
| Payout ratio | 0 | 0 |
| Dividend yield | 0 | 0 |
Interpretation of the Ratios
Zscaler, Inc.
Zscaler shows a mix of strong liquidity ratios with a current and quick ratio above 2.0, indicating solid short-term financial health. However, profitability and efficiency metrics such as net margin (-1.55%), ROE (-2.31%), and asset turnover (0.42) are weak, signaling operational challenges. The company does not pay dividends, reflecting a likely reinvestment strategy amid ongoing growth and negative earnings.
Teradata Corporation
Teradata displays favorable profitability ratios including a high ROE of 85.71% and ROIC of 16.89%, supported by strong interest coverage and asset turnover. However, liquidity is weak with current and quick ratios below 1.0, raising short-term solvency concerns. Teradata also does not pay dividends, which may indicate prioritization of reinvestment or acquisition strategies in a competitive market.
Which one has the best ratios?
Teradata presents a more favorable overall ratio profile with strong profitability and efficiency metrics, despite liquidity weaknesses. Zscaler’s strong liquidity contrasts with lower profitability and operational efficiency, resulting in a slightly unfavorable rating. Thus, Teradata scores better on key performance ratios, while Zscaler’s strengths lie in its balance sheet stability.
Strategic Positioning
This section compares the strategic positioning of Zscaler, Inc. and Teradata Corporation in terms of market position, key segments, and exposure to technological disruption:
Zscaler, Inc.
- Leading cloud security provider in software infrastructure with strong NASDAQ presence.
- Focuses on cloud security solutions, SaaS access, workload segmentation, and digital experience monitoring.
- Operates in cloud security, facing continuous innovation and evolving cyber threats.
Teradata Corporation
- Mid-sized player in software infrastructure with NYSE listing and lower market cap.
- Offers multi-cloud data platforms, enterprise analytics, consulting, and migration support.
- Positioned in multi-cloud analytics with emphasis on integration and ecosystem simplification.
Zscaler, Inc. vs Teradata Corporation Positioning
Zscaler’s strategy concentrates on cloud security with integrated workload and user access solutions, while Teradata provides diversified data analytics and consulting services across multi-cloud environments. Zscaler’s focus is narrower but specialized; Teradata’s is broader but less concentrated.
Which has the best competitive advantage?
Teradata demonstrates a very favorable moat with strong ROIC above WACC and growing profitability, indicating a durable competitive advantage. Zscaler shows slightly unfavorable moat status despite improving ROIC, reflecting value destruction but increasing efficiency.
Stock Comparison
The stock prices of Zscaler, Inc. (ZS) and Teradata Corporation (TDC) have shown contrasting movements over the past year, with ZS exhibiting a bearish decelerating trend and TDC demonstrating a bearish trend with recent acceleration and recovery.
Trend Analysis
Zscaler, Inc.’s stock showed a bearish trend over the past 12 months with a -9.03% price change and decelerating momentum. It reached a high of 331.14 and a low of 156.78, with high volatility (std deviation 47.11).
Teradata Corporation experienced a bearish trend over the same period with a -21.26% price change, but recent acceleration led to a 42.78% gain from November 2025 to January 2026, with low volatility (std deviation 5.63).
Comparing the two, Teradata’s recent strong recovery contrasts with Zscaler’s overall decline, making Teradata the stock with the highest market performance during the recent period.
Target Prices
The current analyst consensus indicates promising upside potential for these technology infrastructure stocks.
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| Zscaler, Inc. | 360 | 260 | 311.41 |
| Teradata Corporation | 35 | 27 | 31 |
Analysts expect Zscaler shares to appreciate significantly from the current price of $213.98, while Teradata’s consensus target of $31 is slightly above its current price of $29.77, indicating moderate growth expectations.
Analyst Opinions Comparison
This section compares analysts’ ratings and grades for Zscaler, Inc. and Teradata Corporation:
Rating Comparison
ZS Rating
- Rating: C-, indicating a very favorable overall rating status.
- Discounted Cash Flow Score: 4, assessed as favorable for valuation.
- ROE Score: 1, considered very unfavorable, reflecting low profitability from equity.
- ROA Score: 1, very unfavorable, showing poor asset utilization.
- Debt To Equity Score: 1, very unfavorable, suggesting higher financial risk.
- Overall Score: 1, very unfavorable, denoting weak overall financial standing.
TDC Rating
- Rating: B+, showing a very favorable overall rating status.
- Discounted Cash Flow Score: 4, also favorable for valuation.
- ROE Score: 5, very favorable, indicating strong profit generation from equity.
- ROA Score: 4, favorable, indicating effective asset use.
- Debt To Equity Score: 1, very unfavorable, also indicating higher financial risk.
- Overall Score: 3, moderate, reflecting a balanced financial position.
Which one is the best rated?
Based strictly on the provided data, Teradata Corporation (TDC) holds a better rating and higher overall score than Zscaler, Inc. (ZS). TDC shows stronger performance in ROE and ROA scores, while both share concerns on debt-to-equity.
Scores Comparison
Here is a comparison of the Altman Z-Score and Piotroski Score for Zscaler and Teradata:
ZS Scores
- Altman Z-Score: 4.89, indicating a safe zone.
- Piotroski Score: 3, classified as very weak.
TDC Scores
- Altman Z-Score: 0.81, indicating distress zone.
- Piotroski Score: 8, classified as very strong.
Which company has the best scores?
Teradata has a very strong Piotroski Score of 8 but falls in the distress zone for Altman Z-Score at 0.81. Zscaler holds a safe zone Altman Z-Score of 4.89 but a very weak Piotroski Score of 3.
Grades Comparison
Here is a comparison of the latest reliable grades from recognized financial institutions for both companies:
Zscaler, Inc. Grades
The table below shows recent grades from established grading companies for Zscaler, Inc.
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Citigroup | Maintain | Buy | 2026-01-13 |
| Keybanc | Maintain | Overweight | 2026-01-12 |
| Piper Sandler | Maintain | Neutral | 2026-01-05 |
| RBC Capital | Maintain | Outperform | 2026-01-05 |
| Mizuho | Upgrade | Outperform | 2025-12-16 |
| Bernstein | Downgrade | Market Perform | 2025-12-01 |
| Citigroup | Maintain | Buy | 2025-12-01 |
| JP Morgan | Maintain | Overweight | 2025-11-26 |
| Baird | Maintain | Outperform | 2025-11-26 |
| BTIG | Maintain | Buy | 2025-11-26 |
Overall, Zscaler’s grades show a predominantly positive trend with several “Buy” and “Outperform” ratings and only one recent downgrade to “Market Perform.”
Teradata Corporation Grades
The following table lists recent grades from recognized institutions for Teradata Corporation.
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Barclays | Maintain | Underweight | 2026-01-12 |
| RBC Capital | Maintain | Sector Perform | 2026-01-05 |
| Morgan Stanley | Maintain | Overweight | 2025-12-17 |
| Citizens | Upgrade | Market Outperform | 2025-11-10 |
| Barclays | Maintain | Underweight | 2025-11-05 |
| TD Cowen | Maintain | Hold | 2025-11-05 |
| Evercore ISI Group | Maintain | Outperform | 2025-11-05 |
| UBS | Maintain | Neutral | 2025-08-06 |
| Guggenheim | Maintain | Buy | 2025-05-07 |
| Barclays | Maintain | Underweight | 2025-04-21 |
Teradata’s grades display a mixed picture with multiple “Underweight” ratings counterbalanced by some “Buy,” “Outperform,” and “Market Outperform” grades.
Which company has the best grades?
Zscaler, Inc. has received predominantly positive grades with a consensus “Buy,” while Teradata Corporation’s grades are more mixed, reflected in a consensus “Hold.” Investors might interpret Zscaler’s stronger grades as a sign of more favorable market sentiment compared to Teradata.
Strengths and Weaknesses
Below is a comparison of key strengths and weaknesses for Zscaler, Inc. (ZS) and Teradata Corporation (TDC) based on the latest financial and operational data.
| Criterion | Zscaler, Inc. (ZS) | Teradata Corporation (TDC) |
|---|---|---|
| Diversification | Focused primarily on cloud security solutions, less diversified. | Broad product and service mix: consulting, recurring software/services, subscription licenses. |
| Profitability | Negative net margin (-1.55%) and ROIC (-3.18%), currently shedding value. | Positive net margin (6.51%) and strong ROIC (16.89%), creating value. |
| Innovation | Growing ROIC trend signals improving profitability; innovation in cloud security. | Durable competitive advantage with increasing profitability and diverse analytics solutions. |
| Global presence | Global cloud security reach but less diversified geographically. | Strong international and U.S. presence with analytics and consulting services. |
| Market Share | Leading in cloud security niche but under profitability pressure. | Established player in data analytics with stable and recurring revenues. |
Key takeaways: Teradata shows a durable competitive advantage with strong profitability and diversified revenue streams, making it a safer investment choice. Zscaler, while innovating and growing profitability, currently faces value destruction and higher risk, requiring cautious consideration.
Risk Analysis
Below is a comparative table highlighting key risks for Zscaler, Inc. (ZS) and Teradata Corporation (TDC) based on the most recent financial and operational data:
| Metric | Zscaler, Inc. (ZS) | Teradata Corporation (TDC) |
|---|---|---|
| Market Risk | Moderate (Beta 1.02; tech sector volatility) | Lower (Beta 0.57; stable demand) |
| Debt Level | Moderate (Debt/Equity ~1.0; favorable debt-to-assets 28%) | High (Debt/Equity 4.33; elevated leverage) |
| Regulatory Risk | Moderate (cloud security regulations evolving) | Moderate (data privacy and compliance) |
| Operational Risk | Moderate (cloud infrastructure complexity) | Moderate (multi-cloud platform integration) |
| Environmental Risk | Low (primarily software, limited direct impact) | Low (software focused, minimal physical footprint) |
| Geopolitical Risk | Moderate (global cloud services exposure) | Moderate (international client base) |
In synthesis, Teradata’s high leverage presents a significant financial risk despite strong profitability indicators, while Zscaler faces operational and regulatory pressures amid moderate debt. Teradata’s Altman Z-Score in the distress zone signals elevated bankruptcy risk, whereas Zscaler remains in the safe zone but with weak profitability and cash flow metrics. Caution is advised, prioritizing risk management and monitoring debt levels closely.
Which Stock to Choose?
Zscaler, Inc. (ZS) shows strong income growth with a 297% revenue increase over five years and favorable income statement metrics, despite negative profitability and returns. Its financial ratios are slightly unfavorable, with solid liquidity but poor profitability and a rating marked as very favorable yet internally weak. The company is shedding value overall but demonstrates improving ROIC trends.
Teradata Corporation (TDC) presents a stable income profile with lower revenue growth and mixed income statement trends, including a modest net margin of 6.5%. Financial ratios are balanced with favorable profitability and return metrics but weak liquidity and high leverage. The rating is very favorable overall, supported by a strong Piotroski score but challenged by a low Altman Z-Score and higher debt.
Investors seeking growth might find Zscaler’s accelerating income and improving profitability metrics appealing, despite its current negative returns and financial ratio challenges. Conversely, those prioritizing value creation and financial stability could view Teradata’s consistent returns and strong economic moat as positive, albeit with some liquidity and leverage concerns. The choice could depend on whether an investor favors growth potential or established value metrics.
Disclaimer: Investment carries a risk of loss of initial capital. The past performance is not a reliable indicator of future results. Be sure to understand risks before making an investment decision.
Go Further
I encourage you to read the complete analyses of Zscaler, Inc. and Teradata Corporation to enhance your investment decisions:
