Financial Analysis: Zillow Group (NASDAQ:ZG) versus Internet Initiative Japan (OTCMKTS:IIJIY)

Internet Initiative Japan (OTCMKTS:IIJIY) and Zillow Group (NASDAQ:ZG) are both mid-cap communication services companies, but which is the better business? We will compare the two companies based on the strength of their institutional ownership, earnings, valuation, analyst recommendations, risk, dividends and profitability.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Internet Initiative Japan	6.34%	15.49%	7.03%
Zillow Group	-3.95%	3.23%	2.67%

Earnings & Valuation

This table compares Internet Initiative Japan and Zillow Group”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Internet Initiative Japan	$2.29 billion	2.02	$159.64 million	$1.79	28.24
Zillow Group	$2.58 billion	2.61	$23.00 million	($0.52)	-57.74

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

Insider and Institutional Ownership

20.3% of Zillow Group shares are held by institutional investors. 6.7% of Internet Initiative Japan shares are held by insiders. Comparatively, 29.9% of Zillow Group shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings for Internet Initiative Japan and Zillow Group, as reported by MarketBeat.

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

Zillow Group has a consensus price target of $47.67, indicating a potential upside of 58.75%. Given Zillow Group’s stronger consensus rating and higher probable upside, analysts clearly believe Zillow Group is more favorable than Internet Initiative Japan.

Volatility & Risk

Internet Initiative Japan has a beta of 1.19, indicating that its stock price is 19% more volatile than the S&P 500. Comparatively, Zillow Group has a beta of 1.95, indicating that its stock price is 95% more volatile than the S&P 500.

Summary

Zillow Group beats Internet Initiative Japan on 8 of the 14 factors compared between the two stocks.

About Internet Initiative Japan

Internet Initiative Japan (IIJ) is a Japanese information technology and telecommunications company founded in 1992. It was among the first commercial internet service providers in Japan and has expanded into a range of network and technology services. The company provides internet connectivity, wide-area networking, cloud computing, cybersecurity, and mobile services. It also offers systems integration and IT outsourcing, helping businesses and public-sector organizations build and manage their technology infrastructure.

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.