Reviewing Zillow Group (NASDAQ:ZG) & Hello Group (NASDAQ:MOMO)

Zillow Group (NASDAQ:ZG) and Hello Group (NASDAQ:MOMO) are both communication services companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, valuation, analyst recommendations, risk, institutional ownership, earnings and profitability.

Volatility and Risk

Zillow Group has a beta of 1.95, indicating that its stock price is 95% more volatile than the S&P 500. Comparatively, Hello Group has a beta of 0.32, indicating that its stock price is 68% less volatile than the S&P 500.

Valuation and Earnings

This table compares Zillow Group and Hello Group”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Zillow Group	$2.58 billion	2.57	$23.00 million	($0.52)	-56.80
Hello Group	$10.10 billion	0.05	$114.97 million	$0.98	4.55

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

Profitability

This table compares Zillow Group and Hello Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Zillow Group	-3.95%	3.23%	2.67%
Hello Group	11.02%	10.43%	8.41%

Insider and Institutional Ownership

20.3% of Zillow Group shares are owned by institutional investors. Comparatively, 51.0% of Hello Group shares are owned by institutional investors. 29.9% of Zillow Group shares are owned by company insiders. Comparatively, 61.4% of Hello Group shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Zillow Group and Hello Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Zillow Group	2	12	9	0	2.30
Hello Group	1	1	1	0	2.00

Zillow Group presently has a consensus price target of $47.67, suggesting a potential upside of 61.39%. Hello Group has a consensus price target of $9.05, suggesting a potential upside of 103.14%. Given Hello Group’s higher probable upside, analysts clearly believe Hello Group is more favorable than Zillow Group.

Summary

Hello Group beats Zillow Group on 10 of the 14 factors compared between the two stocks.

About Zillow Group

Zillow Group, Inc. operates a digital real estate marketplace focused primarily on the United States. Its websites and mobile apps help consumers find homes for sale and rent, explore neighborhood information, and research home values. The company’s brands include Zillow, Trulia, StreetEasy and HotPads. Zillow Group also provides services for real estate professionals, including advertising and customer-management tools, and offers mortgage services through Zillow Home Loans. Zillow launched in 2006, founded by Rich Barton and Lloyd Frink, and grew into a parent company with multiple real estate brands and services.

About Hello Group

Hello Group Inc., formerly known as Momo Inc., is a China-based mobile social and entertainment company. Founded in 2011, it operates Momo, a platform that helps users connect and interact, and Tantan, a dating app acquired by the company in 2018. The company offers social discovery and communication features, along with services such as live streaming and other paid in-app offerings. Its platforms primarily serve users in China. Hello Group is headquartered in Beijing. Founder Tang Yan serves as chairman, and Wang Li has served as the company’s chief executive officer.