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Dr. Charlie Tian is the founder and CEO of GuruFocus.com, a leading global investment research platform established in 2004. With a Ph.D. in physics, Dr. Tian transitioned from science to finance, applying a data-driven, disciplined approach to value investing.
GuruFocus Financial Strength Rank measures how strong a company's financial situation is. It is rated on a scale of 1 to 10 and is based on these factors:
1. The debt burden that the company has as measured by its Interest Coverage (current year). The higher, the better.
2. Debt to revenue ratio. The lower, the better.
3. Altman Z-Score.
4. Other debt related ratios.
A higher score indicates a stronger financial position, with companies rated 7 or above considered financially stable and unlikely to face distress. Conversely, a score of 3 or below suggests potential financial difficulties, indicating a higher risk of distress.
ZTE's Interest Coverage for the quarter that ended in Mar. 2026 was 2.68.
ZTE's debt to revenue ratio for the quarter that ended in Mar. 2026 was 0.49.
As of today, ZTE's Altman Z-Score is 1.92.
The rank is rated on a scale of 1 to 10. A higher score indicates a stronger financial position, with companies rated 7 or above considered financially stable and unlikely to face distress. Conversely, a score of 3 or below suggests potential financial difficulties, indicating a higher risk of distress.
ZTE has the Financial Strength Rank of 5.
ZTE Financial Strength Related Terms
ZTCOF vs CSCO, MSI, HPE: Financial Strength Comparison
For the Communication Equipment subindustry, ZTE's Financial Strength, along with its competitors' market caps and Financial Strength data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
ZTE Financial Strength vs Hardware Industry
For the Hardware industry and Technology sector, ZTE's Financial Strength distribution charts can be found below:
* The bar in red indicates where ZTE's Financial Strength falls into.
Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:
Z-Score model is an accurate forecaster of failure up to two years prior to distress. It can be considered the assessment of the distress of industrial corporations.
The zones of discrimination were as such:
When Z-Score is less than 1.81, it is in Distress Zones.
When Z-Score is greater than 2.99, it is in Safe Zones.
When Z-Score is between 1.81 and 2.99, it is in Grey Zones.
ZTE has a Z-score of 1.92, indicating it is in Grey Zones. This implies that ZTE is in some kind of financial stress. If it is below 1.81, the company may faces bankrupcy risk.
Warning Sign:
Altman Z-score of 1.92 is in the grey area. This implies that the company is under some kind of financial stress. If it is below 1.8, the company may face bankruptcy risk.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
ZTE (ZTCOF) has a Financial Strength of 5 as of Mar. 2026. The financial strength rank measures the strength of a company's balance sheet based on revenue and debt. View historical data on ZTE and its competitors. This is 17% below median its historical median of 6.00. Over the past decade, ZTE's Financial Strength has ranged from 4.00 to 7.00.
Is ZTE's Financial Strength too high?
ZTE's current Financial Strength of 5 is 17% below median its 10-year median of 6.00. Over the past 10 years, this metric has ranged from a low of 4.00 to a high of 7.00. Overall, ZTE has a GF Score™ of 84/100 and is considered Modestly Undervalued, reflecting its overall financial health beyond just this single metric.
How does ZTE's Financial Strength compare to CSCO and MSI?
ZTE's Financial Strength of 5 can be compared against companies in the Hardware industry. Historically, ZTE's own Financial Strength has ranged from 4.00 to 7.00 over the past decade. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Financial Strength for a Hardware company?
A good Financial Strength depends on the Hardware industry context. However, Financial Strength should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Financial Strength mean?
A high Financial Strength can signal that a stock is expensive relative to its fundamentals. The financial strength rank measures the strength of a company's balance sheet based on revenue and debt. View historical data on ZTE and its competitors. ZTE's current Financial Strength is 5, which is 17% below median its own 10-year median of 6.00. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is ZTE stock overvalued right now?
Based on GuruFocus' analysis, ZTE (ZTCOF) is currently considered Modestly Undervalued. The stock's GF Value™ is $3.32, compared to a current price of $2.87 — trading 13.7% below its estimated fair value. The current Financial Strength is 5, which is 17% below median its 10-year median of 6.00. ZTE's overall GF Score™ is 84/100 with 6 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Financial Strength calculated?
Financial Strength is calculated from a company's financial statements. For ZTE (ZTCOF), the current Financial Strength is 5 as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is ZTE (ZTCOF) Overvalued in 2026?
Based on GuruFocus' analysis, ZTE stock appears to be undervalued.
The current stock price of $2.87 is trading 13.7% below its estimated GF Value™ of $3.32.
GuruFocus considers ZTE to be Modestly Undervalued.
Key valuation signals for ZTCOF:
Financial Strength: 5 (17% below median its 10-year median of 6.00)
GF Value™: $3.32 vs. price of $2.87 (13.7% below fair value)
No single metric tells the full story. See the ZTCOF stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
ZTE Corp is a provider of integrated telecommunications and IT solutions with a full range of end-to-end ICT products and solutions integrating design, development, production, sales, and services with a special focus on carriers networks, government and corporate business, and consumer business. It operates in three segments Carriers network, Consumer Business, and Government and Corporate Business. It generates a majority of its revenue from equipment supporting carriers' networks. It has a presence in the PRC, Asia, Africa, Europe, and the Americas. It generates the majority of its revenue from the PRC region.
84GF Score
Get the complete analysis for ZTCOF
Financial Strength is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.
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