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Zhihu (ZH)
NYSE:ZH
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Zhihu
(NYSE:ZH)
46Neutral
Zhihu (ZH) vs. S&P 500 (SPY)
Market Cap
$392.41M
Dividend YieldN/A
Average Volume (3M)1.27M
Price to Earnings (P/E)―
Beta (1Y)0.77
Revenue Growth-9.07%
EPS Growth59.67%
CountryUS
Employees2,731
SectorCommunication Services
Sector Strength74
IndustryInternet Content & Information
Share Statistics
EPS (TTM)-0.24
Shares Outstanding83,041,560
10 Day Avg. Volume720,840
30 Day Avg. Volume1,266,989
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.83
Price to Cash Flow (P/CF)N/A
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$5.10Price Target Upside19.44% Upside
Rating ConsensusHold
Number of Analyst Covering0
Zhihu Business Overview & Revenue Model
Company DescriptionZhihu 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 also offers technology, business support, and consulting services; information transmission, software, and information technology services; information and marketing services; vocational training; and internet services, as well as holds audio-visual permit. The company was founded in 2010 and is headquartered in Beijing, the People's Republic of China.
How the Company Makes MoneyZhihu generates revenue primarily through advertising, membership subscriptions, and content-commerce solutions. Advertising is a major revenue stream, as the platform offers targeted advertising services to businesses looking to reach its large and engaged user base. Additionally, Zhihu offers a premium membership program, which provides subscribers with exclusive content and features, contributing to its revenue. The company also monetizes through content-commerce solutions, which involve partnerships with brands and merchants to integrate shopping experiences within its platform, enabling users to purchase products directly related to the content they consume. These diverse revenue streams are supported by Zhihu's significant user engagement and its reputation as a trusted source of information in China.
Zhihu Financial Statement Overview
Summary
Zhihu shows growth potential with increasing revenues, but profitability remains a concern with persistent negative margins. The balance sheet is strong in terms of equity, providing a cushion against financial volatility. However, negative operating and free cash flows highlight the need for improved cash management and operational efficiency.Income Statement
Zhihu's revenue has shown positive growth over the years, with a notable increase from 2022 to 2023. However, the company continues to experience negative EBIT and net profit margins, reflecting ongoing profitability challenges. The gross profit margin is relatively stable, indicating effective cost management at the gross level.45
Neutral
Balance Sheet
The balance sheet reflects a strong equity position, with a high equity ratio indicating financial stability. However, the company has high liabilities relative to its equity in earlier years, which has improved over time. The debt-to-equity ratio is low, suggesting limited leverage, which is a positive aspect.50
Neutral
Cash Flow
Cash flow from operations remains negative, indicating challenges in generating cash through core business activities. Free cash flow has improved slightly in recent years, but it is still negative. The operating cash flow to net income ratio suggests inefficiencies in converting revenue into cash.40
Negative
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 3.88B | 4.20B | 3.60B | 2.96B | 1.35B | 670.51M | Gross Profit |
| 2.31B | 2.30B | 1.81B | 1.55B | 757.80M | 312.27M | EBIT |
| -671.11M | -1.07B | -1.60B | -1.39B | -602.88M | -1.06B | EBITDA |
| -658.66M | -1.05B | -1.58B | -1.37B | -583.27M | -1.04B | Net Income Common Stockholders |
| -361.85M | -843.64M | -1.58B | -1.30B | -517.55M | -1.00B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 7.21B | 5.46B | 6.26B | 7.21B | 3.10B | 3.54B | Total Assets |
| 8.81B | 6.80B | 7.66B | 8.81B | 3.76B | 3.98B | Total Debt |
| 40.52M | 45.73M | 96.56M | 40.52M | 2.89M | 25.64M | Net Debt |
| -2.12B | -2.06B | -4.43B | -2.12B | -954.93M | -874.71M | Total Liabilities |
| 2.07B | 2.09B | 1.96B | 2.07B | 1.01B | 7.98B | Stockholders Equity |
| 6.74B | 4.60B | 5.65B | 6.74B | 2.75B | -3.99B |
| Cash Flow | Free Cash Flow | ||||
| 0.00 | -424.40M | -1.12B | -447.67M | -246.37M | -721.27M | Operating Cash Flow |
| 0.00 | -415.53M | -1.11B | -440.23M | -244.42M | -715.52M | Investing Cash Flow |
| 0.00 | -1.68B | 3.49B | -3.14B | 430.11M | -2.10B | Financing Cash Flow |
| 0.00 | -365.06M | -108.35M | 4.88B | 9.29M | 3.00B |
Zhihu Technical Analysis
Neutral
4.27
Price Trends
4.57
Negative
4.07
Positive
3.70
Positive
Market Momentum
-0.11
Positive
40.82
Neutral
14.23
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ZH, the sentiment is Neutral. The current price of 4.27 is below the 20-day moving average (MA) of 4.93, below the 50-day MA of 4.57, and above the 200-day MA of 3.70, indicating a neutral trend. The MACD of -0.11 indicates Positive momentum. The RSI at 40.82 is Neutral, neither overbought nor oversold. The STOCH value of 14.23 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for ZH.
Zhihu Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $63.29B | 15.77 | 22.60% | 2.37% | 0.23% | -0.09% | |
76 Outperform | $33.65B | 10.04 | 9.14% | ― | -2.60% | 16.71% | |
66 Neutral | $7.88B | ― | -9.43% | ― | 17.42% | 72.64% | |
63 Neutral | $2.33B | 8.32 | 8.74% | ― | -0.29% | -12.84% | |
59 Neutral | $27.83B | 1.88 | -18.16% | 4.00% | 2.13% | -44.45% | |
52 Neutral | $2.16B | 14.64 | -2.96% | ― | -1.33% | -148.56% | |
46 Neutral | $392.41M | ― | -3.92% | ― | -9.07% | 59.67% |
* Communication Services Sector Average
Performance Comparison
ZH
Zhihu
4.31
-0.07
-1.60%
BIDU
Baidu
91.63
-16.90
-15.57%
NTES
NetEase
106.35
12.14
12.89%
YY
JOYY
42.12
8.83
26.52%
WB
Weibo
9.45
0.85
9.88%
BILI
Bilibili
18.99
7.46
64.70%
Zhihu Earnings Call Summary
Earnings Call Date: Mar 26, 2025 | % Change Since: -7.38% | Next Earnings Date: May 21, 2025
Earnings Call Sentiment Positive
Despite a decline in total revenue and challenges in marketing services and vocational training, Zhihu marked a significant turnaround in profitability, reduced user acquisition costs, and achieved growth in engagement metrics. The company's strategic focus on AI integration and enhancing its community of experts contributed to a positive outlook.Highlights
Turnaround in Profitability
Zhihu reported its first-ever adjusted net income of RMB97.1 million, compared to an adjusted net loss of RMB91.3 million in the same period last year. Additionally, the company swung from an adjusted net operating loss of RMB165.3 million to an adjusted operating profit of RMB23.1 million.
Significant Reduction in User Acquisition Costs
Zhihu achieved an 88% year-over-year reduction in community user acquisition related expenses, contributing to its profitability.
Growth in Key Engagement Metrics
Time spent per DAU grew 23% year-over-year, and core user retention rates improved both sequentially and year-over-year. Average MAUs were 81.4 million, up 0.3% sequentially.
AI Integration and Community Enhancement
Zhihu's AI platform, Zhida, achieved over 10 million MAU and received positive feedback for response completeness and accuracy, highlighting its integration with the community of experts.
Expansion of Content and Creator Base
The cumulative content volume reached 874.6 million, an increase of 12.9% year-over-year, and the community of content creators grew to 77.7 million, up 8.9% year-over-year.
Strong Performance in Self-Operated Vocational Training
The self-operated vocational training business achieved a turnaround in operating profitability and double-digit growth year-over-year.
Lowlights
Decline in Total Revenue
Total revenues for the fourth quarter were RMB859.2 million, compared to RMB1,138.3 million in the same period of 2023, reflecting a decrease of 24.5% due to strategic adjustments away from lower-quality revenue.
Decrease in Marketing Services Revenue
Marketing services revenue for the quarter was RMB315.9 million, compared to RMB465.2 million in the same period of 2023, reflecting a decrease due to the optimization of service offerings.
Vocational Training Revenue Decline
Revenue from vocational training decreased by 50.4% year-over-year to RMB84 million due to strategic refinement of acquired business.
Slight Decline in Paid Membership Revenue
Paid membership revenue was RMB420.2 million, compared to RMB455.9 million in the same period of 2023, with a slight year-over-year decrease in average monthly subscribing members.
Company Guidance
During the fourth quarter of 2024, Zhihu Inc. reported a significant financial turnaround, achieving an adjusted net income of RMB97.1 million, compared to an adjusted net loss of RMB91.3 million in the same period the previous year. The company also transitioned from an adjusted net operating loss of RMB165.3 million to an adjusted operating profit of RMB23.1 million. This improvement was driven by strategic decisions made at the start of 2024, which included a focus on enhancing user engagement and optimizing the community ecosystem. Key user engagement metrics showed growth, with time spent per daily active user increasing by 23% year-over-year, and average monthly active users reaching 81.4 million. Zhihu's revenue for the fourth quarter was RMB859.2 million, with paid membership and vocational training contributing over 62% of total revenues. The company also reported a 78.3% year-over-year increase in income-generating creators for paid members. Additionally, Zhihu's marketing services revenue was RMB315.9 million, and the company ended the year with cash and equivalents totaling RMB4.9 billion.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.