Zhihu (NYSE:ZH – Get Free Report) and WEBTOON Entertainment (NASDAQ:WBTN – Get Free Report) are both small-cap communication services companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, valuation, risk, analyst recommendations, institutional ownership, earnings and profitability.
Valuation & Earnings
This table compares Zhihu and WEBTOON Entertainment”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Zhihu | $393.10 million | 0.63 | -$27.58 million | ($0.55) | -5.17 |
| WEBTOON Entertainment | $1.38 billion | 1.06 | -$345.93 million | ($2.63) | -4.10 |
Profitability
This table compares Zhihu and WEBTOON Entertainment’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Zhihu | -11.33% | -7.71% | -5.75% |
| WEBTOON Entertainment | -25.09% | 2.10% | 1.60% |
Analyst Ratings
This is a breakdown of recent ratings and price targets for Zhihu and WEBTOON Entertainment, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Zhihu | 1 | 0 | 0 | 0 | 1.00 |
| WEBTOON Entertainment | 1 | 5 | 2 | 0 | 2.12 |
WEBTOON Entertainment has a consensus price target of $13.70, indicating a potential upside of 27.09%. Given WEBTOON Entertainment’s stronger consensus rating and higher probable upside, analysts clearly believe WEBTOON Entertainment is more favorable than Zhihu.
Volatility & Risk
Zhihu has a beta of 0.26, meaning that its share price is 74% less volatile than the S&P 500. Comparatively, WEBTOON Entertainment has a beta of 2.62, meaning that its share price is 162% more volatile than the S&P 500.
Insider & Institutional Ownership
28.9% of Zhihu shares are held by institutional investors. 13.6% of Zhihu shares are held by insiders. Comparatively, 5.6% of WEBTOON Entertainment shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Summary
WEBTOON Entertainment beats Zhihu on 9 of the 14 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 WEBTOON Entertainment
WEBTOON Entertainment Inc. operates a storytelling platform worldwide. The company’s platform allows a community of creators and users to discover, create, and share new content. Its platform offers stories primarily in two ways, including web-comics, a graphical comic-like medium; and web-novels, which are text-based stories. The company was founded in 2014 and is headquartered in Los Angeles, California. WEBTOON Entertainment Inc. is a subsidiary of NAVER Corporation.
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