Head to Head Analysis: Zhihu (NYSE:ZH) and Emerald (NYSE:EEX)

Zhihu (NYSE:ZH) and Emerald (NYSE:EEX) are both small-cap computer and technology companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, earnings, dividends, risk, institutional ownership, profitability and valuation.

Volatility and Risk

Zhihu has a beta of 0.15, indicating that its stock price is 85% less volatile than the S&P 500. Comparatively, Emerald has a beta of 1.38, indicating that its stock price is 38% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Zhihu	-19.78%	-16.88%	-11.77%
Emerald	-1.09%	N/A	-0.40%

Institutional and Insider Ownership

28.9% of Zhihu shares are owned by institutional investors. Comparatively, 14.9% of Emerald shares are owned by institutional investors. 13.6% of Zhihu shares are owned by company insiders. Comparatively, 11.5% of Emerald shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Zhihu and Emerald’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Zhihu	$4.17 billion	0.08	-$118.82 million	($1.14)	-2.70
Emerald	$393.40 million	2.67	-$8.20 million	($0.75)	-6.88

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

Analyst Recommendations

This is a breakdown of current ratings and price targets for Zhihu and Emerald, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Zhihu	0	0	1	0	3.00
Emerald	0	0	1	0	3.00

Zhihu presently has a consensus target price of $5.40, indicating a potential upside of 75.32%. Emerald has a consensus target price of $8.20, indicating a potential upside of 58.91%. Given Zhihu’s higher possible upside, analysts plainly believe Zhihu is more favorable than Emerald.

Summary

Emerald beats Zhihu on 7 of the 12 factors compared between the two stocks.

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.

About Emerald

Emerald Holding, Inc. operates business-to-business (B2B) trade shows in the United States. The company provides B2B trade show franchises; and B2B print publications and digital media products, which provide industry specific business news and information across various sectors. It also offers B2B e-commerce and digital merchandising solutions to manufacturers and retailers through Elastic Suite and Bulletin platforms. The company serves retail, design, technology, equipment, and safety and security. Emerald Holding, Inc. was incorporated in 2013 and is headquartered in New York, New York.