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Zhihu (ZH)
NYSE:ZH
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Zhihu
(NYSE:ZH)
Rating:58Neutral
Price Target:
$5.00
▲(11.86%Upside)
Zhihu (ZH) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$424.70M
Dividend YieldN/A
Average Volume (3M)368.80K
Price to Earnings (P/E)―
Beta (1Y)0.84
Revenue Growth-19.68%
EPS Growth99.02%
CountryUS
Employees1,887
SectorCommunication Services
Sector Strength71
IndustryInternet Content & Information
Share Statistics
EPS (TTM)-0.02
Shares Outstanding82,519,170
10 Day Avg. Volume234,237
30 Day Avg. Volume368,799
Financial Highlights & Ratios
PEG Ratio-1.51
Price to Book (P/B)0.67
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
$3.50Price Target Upside-21.70% Downside
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 through a diversified model primarily centered around advertising, paid memberships, and content-commerce solutions. Advertising forms a significant portion of its income, leveraging its large user base and targeted advertising solutions to attract businesses seeking to reach specific demographics. Paid memberships offer users premium features such as exclusive content, enhanced search capabilities, and an ad-free experience, contributing to a steady subscription revenue stream. Additionally, Zhihu has developed content-commerce solutions, enabling monetization of user-generated content through e-commerce integrations and partnerships, further expanding its revenue potential.
Zhihu Earnings Call Summary
Earnings Call Date:May 27, 2025
(Q1-2025)
| % Change Since: 13.74%|
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's financial profile reflects ongoing profitability and cash flow challenges. Despite maintaining a solid equity base, revenue volatility and persistent losses hinder overall performance. Key concerns include negative EBIT, net profit margins, and cash flow deficits.Income Statement
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.45
Neutral
Balance Sheet
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.50
Neutral
Cash Flow
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.40
Negative
| Breakdown | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 3.60B | 4.20B | 3.60B | 2.96B | 1.35B |
| Gross Profit | 2.18B | 2.30B | 1.81B | 1.55B | 757.80M |
| EBITDA | -459.13M | -1.05B | -1.58B | -1.37B | -583.27M |
| Net Income | -171.80M | -843.64M | -1.58B | -1.30B | -517.55M |
Balance Sheet | |||||
| Total Assets | 5.73B | 6.80B | 7.66B | 8.81B | 3.76B |
| Cash, Cash Equivalents and Short-Term Investments | 4.86B | 5.46B | 6.26B | 7.21B | 3.10B |
| Total Debt | 19.13M | 45.73M | 96.56M | 40.52M | 2.89M |
| Total Liabilities | 1.54B | 2.09B | 1.96B | 2.07B | 1.01B |
| Stockholders Equity | 4.14B | 4.60B | 5.65B | 6.74B | 2.75B |
Cash Flow | |||||
| Free Cash Flow | -282.92M | -424.40M | -1.12B | -447.67M | -246.37M |
| Operating Cash Flow | -280.19M | -415.53M | -1.11B | -440.23M | -244.42M |
| Investing Cash Flow | 2.56B | -1.68B | 3.49B | -3.14B | 430.11M |
| Financing Cash Flow | -403.86M | -365.06M | -108.35M | 4.88B | 9.29M |
Zhihu Technical Analysis
Neutral
4.47
Price Trends
4.15
Positive
4.23
Positive
4.02
Positive
Market Momentum
0.17
Positive
52.60
Neutral
31.55
Neutral
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 4.47 is below the 20-day moving average (MA) of 4.55, above the 50-day MA of 4.15, and above the 200-day MA of 4.02, indicating a neutral trend. The MACD of 0.17 indicates Positive momentum. The RSI at 52.60 is Neutral, neither overbought nor oversold. The STOCH value of 31.55 is Neutral, 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 (55)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $2.50B | 7.53 | 10.79% | 8.06% | 0.83% | 22.06% | |
75 Outperform | $929.58M | 24.98 | 32.17% | ― | 113.43% | ― | |
73 Outperform | $1.54B | 23.33 | 9.18% | 4.60% | 26.71% | -23.67% | |
67 Neutral | $925.38M | 54.52 | 4.85% | ― | 10.41% | 122.27% | |
64 Neutral | $2.65B | ― | -2.48% | 3.65% | -3.61% | -143.37% | |
58 Neutral | $424.70M | ― | -0.39% | ― | -19.68% | 99.02% | |
55 Neutral | HK$68.54B | -1.86 | -3.62% | 5.63% | -4.09% | -17.08% |
* Communication Services Sector Average
Performance Comparison
ZH
Zhihu
4.47
1.22
37.54%
JOYY
JOYY
50.44
18.02
55.58%
WB
Weibo
10.18
3.27
47.32%
EVER
EverQuote
25.20
-0.56
-2.17%
OPRA
Opera
16.95
5.47
47.65%
FVRR
Fiverr International
25.34
3.05
13.68%
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.