Analyzing Zhihu (NYSE:ZH) & Pinterest (NYSE:PINS)

Pinterest (NYSE:PINS) and Zhihu (NYSE:ZH) are both communication services companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitability, valuation, risk, dividends, institutional ownership, analyst recommendations and earnings.

Profitability

This table compares Pinterest and Zhihu’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Pinterest	5.46%	7.49%	5.62%
Zhihu	-11.33%	-7.71%	-5.75%

Analyst Ratings

This is a summary of recent ratings and price targets for Pinterest and Zhihu, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Pinterest	0	19	17	0	2.47
Zhihu	1	0	0	0	1.00

Pinterest presently has a consensus target price of $27.90, suggesting a potential upside of 20.26%. Given Pinterest’s stronger consensus rating and higher possible upside, equities analysts clearly believe Pinterest is more favorable than Zhihu.

Insider & Institutional Ownership

88.8% of Pinterest shares are owned by institutional investors. Comparatively, 28.9% of Zhihu shares are owned by institutional investors. 8.1% of Pinterest shares are owned by company insiders. Comparatively, 13.6% of Zhihu shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Volatility and Risk

Pinterest has a beta of 0.9, indicating that its stock price is 10% less volatile than the S&P 500. Comparatively, Zhihu has a beta of 0.28, indicating that its stock price is 72% less volatile than the S&P 500.

Valuation & Earnings

This table compares Pinterest and Zhihu”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Pinterest	$4.22 billion	3.08	$416.86 million	$0.34	68.24
Zhihu	$393.10 million	0.63	-$27.58 million	($0.55)	-5.20

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

Summary

Pinterest beats Zhihu on 13 of the 14 factors compared between the two stocks.

About Pinterest

Pinterest, Inc. operates as a visual search and discovery platform in the United States and internationally. Its platform allows people to find ideas, such as recipes, home and style inspiration, and others; and to search, save, and shop the ideas. The company was formerly known as Cold Brew Labs Inc. and changed its name to Pinterest, Inc. in April 2012. Pinterest, Inc. was incorporated in 2008 and is headquartered in San Francisco, California.

About Zhihu

Zhihu Inc. operates an online content community in the People’s Republic of China. Its community allows people to seek inspiration, find solutions, make decisions, and have fun. The company offers technology, business support, and consulting services; information transmission, software, and information technology services. It also offers information and marketing services; vocational training; and internet services, as well as holds audio-visual permit. Zhihu Inc. was founded in 2010 and is headquartered in Beijing, the People’s Republic of China.