Contrasting ADTRAN (NASDAQ:ADTN) and ZTE (OTCMKTS:ZTCOF)

ZTE (OTCMKTS:ZTCOF) and ADTRAN (NASDAQ:ADTN) are both computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, dividends, valuation, profitability, risk, analyst recommendations and institutional ownership.

Valuation and Earnings

This table compares ZTE and ADTRAN’s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ZTE	N/A	N/A	N/A	$0.76	2.84
ADTRAN	$949.97 million	0.42	-$267.69 million	($6.88)	-0.73

ZTE has higher earnings, but lower revenue than ADTRAN. ADTRAN is trading at a lower price-to-earnings ratio than ZTE, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares ZTE and ADTRAN’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ZTE	N/A	N/A	N/A
ADTRAN	-58.64%	-29.26%	-8.54%

Analyst Recommendations

This is a breakdown of recent ratings and price targets for ZTE and ADTRAN, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ZTE	1	0	0	0	1.00
ADTRAN	0	2	2	1	2.80

ADTRAN has a consensus price target of $7.17, suggesting a potential upside of 41.91%. Given ADTRAN’s stronger consensus rating and higher probable upside, analysts clearly believe ADTRAN is more favorable than ZTE.

Institutional and Insider Ownership

5.3% of ZTE shares are held by institutional investors. Comparatively, 80.6% of ADTRAN shares are held by institutional investors. 2.0% of ADTRAN shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

ADTRAN beats ZTE on 7 of the 12 factors compared between the two stocks.

About ZTE

ZTE Corporation engages in the provision of integrated communication information solutions in the People's Republic of China, rest of Asia, Africa, Europe, the United States, and Oceania. It operates through three segments: Carriers' Networks, Government and Corporate Business, and Consumer Business. The Carriers' Network segment provides wireless access, wireline access, bearer networks, core networks, server and storage, and other innovative technologies and product solutions. The Consumer Business segment is involved in the development, production and sale of home information terminal, smart phones, mobile internet terminals, and innovative fusion terminals, as well as provision of related software application and value-added services. The Government and Corporate Business segment focuses on providing informatization solutions for the government and corporations through the application of products, such as communications networks, Internet of Things, big data, and cloud computing. The company was founded in 1985 and is headquartered in Shenzhen, the People's Republic of China.

About ADTRAN

ADTRAN Holdings, Inc., through its subsidiaries, provides networking and communications platforms, software, systems, and services in the United States, Germany, the United Kingdom, and internationally. It operates through two segments, Network Solutions, and Services & Support. It offers residential gateways; ethernet passive optical network ONUs; gigabit passive optical network/XGS-PON ONTs; traditional SSE, routers, and switches; edge cloud; carrier ethernet network interface devices; Optical Line Terminals; Packet Aggregation, Copper Access, and Oscilloquartz; optical transport and engine solutions; infrastructure monitoring solution; and training, professional, software, and managed services. The company also provides various software, such as Mosaic One SaaS, n-Command, Procloud, MCP, AOE and ACI-E, and Ensemble Controller. It serves large, medium, and small service providers; alternative service providers, such as utilities, municipalities and fiber overbuilders; cable/MSOs; and SMBs and distributed enterprises. ADTRAN Holdings, Inc. was incorporated in 1985 and is headquartered in Huntsville, Alabama.