Zhihu (ZH) versus Its Peers Critical Review

Zhihu (NYSE:ZH) is one of 192 public companies in the “Interactive Media & Services” industry, but how does it compare to its competitors? We will compare Zhihu to similar businesses based on the strength of its risk, analyst recommendations, earnings, dividends, valuation, institutional ownership and profitability.

Institutional and Insider Ownership

28.9% of Zhihu shares are held by institutional investors. Comparatively, 41.1% of shares of all “Interactive Media & Services” companies are held by institutional investors. 13.6% of Zhihu shares are held by company insiders. Comparatively, 24.0% of shares of all “Interactive Media & Services” companies are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Zhihu and its competitors, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Zhihu	1	0	0	0	1.00
Zhihu Competitors	1437	5993	11526	441	2.57

As a group, “Interactive Media & Services” companies have a potential upside of 37.71%. Given Zhihu’s competitors stronger consensus rating and higher probable upside, analysts plainly believe Zhihu has less favorable growth aspects than its competitors.

Earnings and Valuation

This table compares Zhihu and its competitors revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Zhihu	$2.64 billion	-$27.58 million	-4.81
Zhihu Competitors	$13.01 billion	$3.45 billion	20.78

Zhihu’s competitors have higher revenue and earnings than Zhihu. Zhihu is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Profitability

This table compares Zhihu and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Zhihu	-11.33%	-7.71%	-5.75%
Zhihu Competitors	-349.32%	-16.54%	4.26%

Volatility & Risk

Zhihu has a beta of 0.22, meaning that its share price is 78% less volatile than the S&P 500. Comparatively, Zhihu’s competitors have a beta of 1.84, meaning that their average share price is 84% more volatile than the S&P 500.

Summary

Zhihu competitors beat Zhihu on 11 of the 13 factors compared.

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.