Head-To-Head Analysis: ServiceNow (NYSE:NOW) versus Teradata (NYSE:TDC)

Teradata (NYSE:TDC) and ServiceNow (NYSE:NOW) are both computer and technology companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, earnings, institutional ownership, profitability, dividends, risk and analyst recommendations.

Insider and Institutional Ownership

90.3% of Teradata shares are owned by institutional investors. Comparatively, 87.2% of ServiceNow shares are owned by institutional investors. 0.9% of Teradata shares are owned by company insiders. Comparatively, 0.4% of ServiceNow shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Teradata and ServiceNow”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Teradata	$1.75 billion	1.22	$114.00 million	$1.17	18.93
ServiceNow	$11.47 billion	17.66	$1.43 billion	$7.36	132.93

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

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Teradata and ServiceNow, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Teradata	3	3	4	0	2.10
ServiceNow	1	2	30	1	2.91

Teradata presently has a consensus price target of $33.70, indicating a potential upside of 52.14%. ServiceNow has a consensus price target of $1,041.00, indicating a potential upside of 6.40%. Given Teradata’s higher probable upside, analysts plainly believe Teradata is more favorable than ServiceNow.

Profitability

This table compares Teradata and ServiceNow’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Teradata	6.51%	149.16%	8.58%
ServiceNow	12.97%	17.11%	8.18%

Volatility and Risk

Teradata has a beta of 0.8, indicating that its share price is 20% less volatile than the S&P 500. Comparatively, ServiceNow has a beta of 1.08, indicating that its share price is 8% more volatile than the S&P 500.

Summary

ServiceNow beats Teradata on 10 of the 15 factors compared between the two stocks.

About Teradata

Teradata Corporation, together with its subsidiaries, provides a connected multi-cloud data platform for enterprise analytics. The company offers Teradata Vantage, an open and connected platform designed to leverage data across an enterprise. Its business consulting services include support services for organizations to establish a data and analytic vision, enable a multi-cloud ecosystem architecture, and identify and operationalize analytical opportunities, as well as to ensure the analytical infrastructure delivers value. The company offers support and maintenance services. It serves clients in financial services, government, healthcare and life sciences, manufacturing, retail, telecommunications, and travel/transportation sectors through a direct sales force in the Americas, Europe, the Middle East, Africa, the Asia Pacific, and Japan. Teradata Corporation was incorporated in 1979 and is headquartered in San Diego, California.

About ServiceNow

ServiceNow, Inc. provides end to-end intelligent workflow automation platform solutions for digital businesses in the North America, Europe, the Middle East and Africa, Asia Pacific, and internationally. The company operates the Now platform for end-to-end digital transformation, artificial intelligence, machine learning, robotic process automation, process mining, performance analytics, and collaboration and development tools. It also provides asset management, cloud observability, integrated risk management; information technology (IT) service management applications; IT service management product suite for enterprise's employees, customers, and partners; strategic portfolio management product suite; IT operations management product that connects a customer's physical and cloud-based IT infrastructure; IT asset management; and security operations that connects with internal and third party. In addition, the company offers integrated risk management product to manage risk and resilience; environmental, social and governance management product; human resources, legal, and workplace service delivery products; customer service management product; and field service management applications. Further, the company provides app engine product; automation engine; platform privacy and security product; and source-to-pay operations. It serves to government, financial services, healthcare, telecommunications, manufacturing, IT services, technology, oil and gas, education, and consumer products through service providers and resale partners. The company was formerly known as Service-now.com and changed its name to ServiceNow, Inc. in May 2012. ServiceNow, Inc. was founded in 2004 and is headquartered in Santa Clara, California.