Zhihu (ZH) AI Stock Analysis

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Zhihu

(NYSE:ZH)

Rating:63Neutral

Price Target:

$5.00

▲(2.67% Upside)

Zhihu's overall stock score reflects a mixed outlook. The most significant factor is the company's financial performance challenges, particularly in profitability and cash flow management. However, positive technical indicators and a strong earnings call, highlighting profitability and AI-driven growth, provide a counterbalance. The valuation is moderate, with no dividend yield to attract income-focused investors.

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

Market Cap

$425.89M

Dividend YieldN/A

Average Volume (3M)348.03K

Price to Earnings (P/E)20.9

Beta (1Y)0.83

Revenue Growth-22.16%

EPS GrowthN/A

CountryUS

Employees1,887

SectorCommunication Services

Sector Strength96

IndustryInternet Content & Information

Share Statistics

EPS (TTM)0.12

Shares Outstanding82,519,170

10 Day Avg. Volume326,070

30 Day Avg. Volume348,028

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)N/A

P/FCF RatioN/A

Enterprise Value/Market Cap-0.65

Enterprise Value/Revenue-0.08

Enterprise Value/Gross Profit-0.13

Enterprise Value/Ebitda0.58

Forecast

1Y Price Target

$5.00

Price Target Upside2.67% 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 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:Aug 27, 2025

(Q2-2025)

% Change Since: |

Next Earnings Date:Nov 26, 2025

Earnings Call Sentiment Neutral

The earnings call reflects a positive outlook with significant achievements in profitability and operational efficiency, driven by AI integration and enhanced user engagement. However, the company faces challenges in revenue growth, specifically in marketing services and vocational training.

Q2-2025 Updates

Positive Updates

Non-GAAP Profitability Achieved

Zhihu achieved non-GAAP profitability for the third consecutive quarter with an adjusted net income of RMB 91.3 million, compared to a loss of RMB 44.6 million in the same period last year. This highlights the strength of their disciplined operating strategy.

Improved Gross Margin

Gross margin expanded to 62.5% from 59.6% in the same period of 2024 due to improvements in monetization capabilities and operating efficiency.

AI Integration and Content Growth

AI-related content maintained a year-over-year growth of over 45% for two consecutive quarters. The platform is also a launch pad for new AI technologies and products.

Increased Engagement Metrics

Average daily user time spent increased by 15% year-over-year, and core user retention improved significantly both sequentially and year-over-year.

Expansion of AI Capabilities

The company launched a major update to Zhihu Zhida, integrating AI more deeply into user interactions and reducing AI hallucinations in professional domains.

Negative Updates

Revenue Decline

Total revenue decreased to RMB 716.9 million compared to RMB 933.8 million in the same period of 2024 due to ongoing business optimization.

Marketing Services Revenue Drop

Marketing services revenue decreased to RMB 222.8 million from RMB 344 million in the same period of 2024, although the year-over-year decline narrowed.

Vocational Training Revenue Fall

Vocational training revenue fell to RMB 62.1 million from RMB 133.6 million in the same period of 2024, as the focus shifted to high-performing course categories.

Company Guidance

In the second quarter of 2025, Zhihu Inc. reported its third consecutive quarter of non-GAAP profitability, showcasing a significant turnaround from a loss of RMB 44.6 million in the same period last year to an adjusted net income of RMB 91.3 million. This improvement was complemented by a 3 percentage point increase in gross margin year-over-year. The platform saw stable Monthly Active Users (MAUs) from the previous quarter, with notable gains in daily time spent, core user retention, and high-tier creator engagement, both sequentially and year-over-year. Additionally, average daily user time spent exceeded 39 minutes, marking a 15% increase from the prior year. The company also noted a 10% sequential increase in daily high-quality content creation, with AI-related content experiencing over 45% year-over-year growth for two consecutive quarters. Furthermore, paid membership revenue reached RMB 402 million, despite a slight sequential decline, while marketing services revenue grew by 13.1% quarter-over-quarter to RMB 222.8 million. Overall, Zhihu's strategic focus on enhancing user engagement, optimizing content quality, and leveraging AI capabilities appears to be paving the way for sustainable growth and profitability.

Zhihu Financial Statement Overview

Summary

Zhihu's financial performance is challenged by inconsistent revenue and ongoing profitability issues, despite a strong equity base. The company faces significant hurdles in operational efficiency and cash flow management.

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	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

Technical Analysis Sentiment

Positive

Last Price4.87

Price Trends

50DMA

4.53

Positive

100DMA

4.21

Positive

200DMA

4.16

Positive

Market Momentum

MACD

0.11

Negative

RSI

57.20

Neutral

STOCH

49.69

Neutral

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 4.87 is above the 20-day moving average (MA) of 4.66, above the 50-day MA of 4.53, and above the 200-day MA of 4.16, indicating a bullish trend. The MACD of 0.11 indicates Negative momentum. The RSI at 57.20 is Neutral, neither overbought nor oversold. The STOCH value of 49.69 is Neutral, 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 (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
OPRA	75 Outperform	$1.60B	22.16	8.57%	4.38%	29.62%	-19.65%
EVER	74 Outperform	$859.51M	18.96	34.34%	―	92.91%	―
WB	71 Outperform	$2.84B	8.29	10.77%	7.00%	1.49%	14.94%
FVRR	69 Neutral	$873.69M	49.91	5.00%	―	12.60%	64.81%
ZH	63 Neutral	$425.89M	20.95	3.27%	―	-22.16%	―
Sector *	60 Neutral	$46.60B	4.09	-11.41%	4.12%	1.85%	-42.71%
JOYY	59 Neutral	$3.21B	―	-2.33%	2.98%	-6.82%	-150.90%

* Communication Services Sector Average

Performance Comparison

Zhihu

4.87

1.51

44.94%

JOYY

62.57

28.59

84.14%

Weibo

11.71

5.31

82.97%

EVER

EverQuote

23.54

1.23

5.51%

OPRA

Opera

17.82

4.47

33.48%

FVRR

Fiverr International

23.70

-0.70

-2.87%

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: Aug 28, 2025