Zhihu (ZH) AI Stock Analysis

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Zhihu

(NYSE:ZH)

Rating:57Neutral

Price Target:

$4.50

▲(2.51%Upside)

Zhihu's overall stock score reflects a mix of positive technical momentum and strategic improvements highlighted in the earnings call, offset by significant financial and valuation challenges. Key strengths include the first non-GAAP net profit and improved user engagement. However, ongoing revenue declines and high valuation risks weigh heavily on the score.

Zhihu (ZH) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$362.67M

Dividend YieldN/A

Average Volume (3M)327.14K

Price to Earnings (P/E)―

Beta (1Y)0.87

Revenue Growth-19.68%

EPS Growth99.02%

CountryUS

Employees1,887

SectorCommunication Services

Sector Strength84

IndustryInternet Content & Information

Share Statistics

EPS (TTM)-0.02

Shares Outstanding82,519,170

10 Day Avg. Volume596,842

30 Day Avg. Volume327,143

Financial Highlights & Ratios

PEG Ratio-0.30

Price to Book (P/B)0.64

Price to Sales (P/S)0.00

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

$5.10

Price Target Upside16.17% 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 primarily generates revenue through a diversified business model that includes advertising, membership subscriptions, content-commerce solutions, and e-commerce. Advertising revenue comes from display ads, native ads, and content marketing services offered to businesses looking to reach Zhihu's engaged audience. The membership subscription model offers users premium services such as exclusive content, enhanced features, and ad-free experiences. Zhihu also earns from content-commerce solutions, where it facilitates the sale of products and services related to the content on its platform, earning a commission. Additionally, the company has partnerships with educational institutions and businesses to offer online courses and professional development resources, further contributing to its revenue.

Zhihu Earnings Call Summary

Earnings Call Date:May 27, 2025

(Q1-2025)

% Change Since: 11.70%|

Next Earnings Date:Aug 21, 2025

Earnings Call Sentiment Neutral

The earnings call presented a mix of positive achievements and ongoing challenges. While Zhihu reported its first non-GAAP net profit in a first quarter since its IPO and showed improvements in user engagement and content growth, the company also faced significant revenue declines in key segments such as marketing services and vocational training. The strategic focus on AI and community engagement is promising, but the revenue shortfalls highlight areas that need continued attention.

Q1-2025 Updates

Positive Updates

First Quarter Non-GAAP Net Profit

Zhihu achieved a non-GAAP net income of RMB6.9 million, compared to an adjusted net loss of RMB135.7 million in the same period last year. This marks the first time the company has achieved a non-GAAP net profit in the first quarter since its IPO.

Improved User Engagement Metrics

Average daily user time spent increased by 17.6% year-over-year to nearly 38 minutes. Core user retention rate also improved both sequentially and year-over-year.

Growth in AI-Related Content

AI-related professional content grew by 46% year-over-year, highlighting Zhihu's position as a leading source of trustworthy professional content.

Expansion of Professional Creator Network

The number of daily active high-tier content creators grew sequentially, with verified owner creators increasing by 20% year-over-year.

Negative Updates

Decline in Total Revenue

Total revenue for the quarter was RMB729.7 million, a decrease from RMB960.9 million in the same period of 2024, reflecting ongoing adjustments to the business.

Marketing Services Revenue Decline

Revenue from marketing services was RMB197 million, representing a year-over-year decline of 40.4%, attributed to changes in the content model and a decrease in low-quality marketing content consumption.

Vocational Training Revenue Drop

Vocational training revenue was RMB94.5 million, down 35% year-over-year, as the company transitions to a new business model.

Company Guidance

During the first quarter of 2025, Zhihu Inc. achieved a significant milestone by reporting a non-GAAP net income of RMB6.9 million, compared to an adjusted net loss of RMB135.7 million in the same period the previous year. This marks the company's first non-GAAP net profit in the first quarter since its IPO. The company's total revenue was RMB729.7 million, reflecting a year-over-year decline of 24.1% from RMB960.9 million in 2024. Revenue from marketing services saw a year-over-year decrease of 40.4% to RMB197 million, while paid membership revenue remained stable at RMB417.9 million, and vocational training revenue experienced a 35% drop to RMB94.5 million. Zhihu's gross margin improved by 5.2 percentage points to 61.8%, alongside a 34.4% reduction in total operating expenses. The company maintained a strong cash and cash equivalents position of RMB4.8 billion as of March 31, 2025. Additionally, Zhihu announced a new 2025 share repurchase program, authorizing the buyback of up to 10% of the total issued shares, pending shareholder approval.

Zhihu Financial Statement Overview

Summary

Zhihu faces profitability and cash flow challenges despite a solid equity base. Revenue volatility and ongoing losses hamper overall performance, with significant operational efficiency hurdles and a need for better cash utilization.

Income Statement

Neutral

Zhihu shows an inconsistent revenue trajectory with a recent decline from 2023 to 2024. The gross profit margin remains robust above 60%, yet negative EBIT and net profit margins indicate ongoing profitability challenges. While there is some improvement in net loss over time, the company faces significant operational efficiency hurdles.

Balance Sheet

Neutral

Zhihu maintains a solid equity base, with an improving Debt-to-Equity ratio due to low debt levels. However, the Return on Equity remains negative due to persistent losses, indicating that equity is not currently generating shareholder value. The equity ratio shows strong equity in the asset structure, yet profitability remains a concern.

Cash Flow

Negative

Although operating cash flow deficits have narrowed, Zhihu's free cash flow remains negative, restraining flexibility. The operating cash flow to net income ratio is not favorable, highlighting cash generation issues. Despite improvements, cash flow management poses significant risks to financial stability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	3.88B	3.60B	4.20B	3.60B	2.96B	1.35B
Gross Profit	2.31B	2.18B	2.30B	1.81B	1.55B	757.80M
EBITDA	-658.66M	-459.13M	-1.05B	-1.58B	-1.37B	-583.27M
Net Income	-361.85M	-171.80M	-843.64M	-1.58B	-1.30B	-517.55M
Balance Sheet
Total Assets	3.98B	5.73B	6.80B	7.66B	8.81B	3.76B
Cash, Cash Equivalents and Short-Term Investments	3.54B	4.86B	5.46B	6.26B	7.21B	3.10B
Total Debt	2.89M	19.13M	45.73M	96.56M	40.52M	2.89M
Total Liabilities	765.93M	1.54B	2.09B	1.96B	2.07B	1.01B
Stockholders Equity	3.22B	4.14B	4.60B	5.65B	6.74B	2.75B
Cash Flow
Free Cash Flow	0.00	-282.92M	-424.40M	-1.12B	-447.67M	-246.37M
Operating Cash Flow	0.00	-280.19M	-415.53M	-1.11B	-440.23M	-244.42M
Investing Cash Flow	0.00	2.56B	-1.68B	3.49B	-3.14B	430.11M
Financing Cash Flow	0.00	-403.86M	-365.06M	-108.35M	4.88B	9.29M

Zhihu Technical Analysis

Technical Analysis Sentiment

Positive

Last Price4.39

Price Trends

50DMA

3.94

Positive

100DMA

4.29

Positive

200DMA

3.95

Positive

Market Momentum

MACD

0.05

Negative

RSI

68.07

Neutral

STOCH

95.05

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ZH, the sentiment is Positive. The current price of 4.39 is above the 20-day moving average (MA) of 3.91, above the 50-day MA of 3.94, and above the 200-day MA of 3.95, indicating a bullish trend. The MACD of 0.05 indicates Negative momentum. The RSI at 68.07 is Neutral, neither overbought nor oversold. The STOCH value of 95.05 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ZH.

Zhihu Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
OPRA	81 Outperform	$1.79B	27.11	9.18%	3.90%	26.71%	-23.67%
EVER	75 Outperform	$886.92M	23.83	32.17%	―	113.43%	―
WB	73 Outperform	$2.34B	7.06	10.79%	8.59%	0.83%	22.06%
FVRR	67 Neutral	$1.04B	61.14	4.85%	―	10.41%	122.27%
JOYY	64 Neutral	$2.63B	―	-2.48%	7.42%	-3.61%	-143.37%
Sector *	62 Neutral	€3.68B	3.59	4.45%	4.87%	5.39%	-160.72%
ZH	57 Neutral	$362.67M	―	-0.39%	―	-19.68%	99.02%

* Communication Services Sector Average

Performance Comparison

Zhihu

4.39

1.31

42.53%

JOYY

50.68

18.87

59.32%

Weibo

9.55

2.30

31.72%

EVER

EverQuote

24.53

2.62

11.96%

OPRA

Opera

19.98

7.09

55.00%

FVRR

Fiverr International

28.90

5.34

22.67%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Jul 05, 2025