Zhihu (NYSE:ZH) vs. Emerald (NYSE:EEX) Head-To-Head Analysis

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

Earnings and Valuation

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

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

Emerald has higher earnings, but lower revenue 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.

Profitability

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

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

Analyst Recommendations

This is a summary of recent ratings for Emerald and Zhihu, as reported by MarketBeat.com.

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

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

Insider and Institutional Ownership

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

Volatility and Risk

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

Summary

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

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.

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.