Perion Network (NASDAQ:PERI) & Zhihu (NYSE:ZH) Head-To-Head Contrast

Zhihu (NYSE:ZH) and Perion Network (NASDAQ:PERI) are both small-cap computer and technology companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, analyst recommendations, institutional ownership, dividends, valuation and profitability.

Insider & Institutional Ownership

28.9% of Zhihu shares are held by institutional investors. Comparatively, 68.1% of Perion Network shares are held by institutional investors. 13.6% of Zhihu shares are held by company insiders. Comparatively, 2.8% of Perion Network shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of current recommendations for Zhihu and Perion Network, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Zhihu	1	0	1	0	2.00
Perion Network	1	1	4	0	2.50

Zhihu presently has a consensus price target of $4.70, indicating a potential upside of 13.12%. Perion Network has a consensus price target of $14.00, indicating a potential upside of 56.08%. Given Perion Network’s stronger consensus rating and higher probable upside, analysts clearly believe Perion Network is more favorable than Zhihu.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Zhihu	4.34%	3.24%	2.36%
Perion Network	-1.12%	2.68%	2.13%

Volatility & Risk

Zhihu has a beta of 0.23, indicating that its share price is 77% less volatile than the S&P 500. Comparatively, Perion Network has a beta of 1.55, indicating that its share price is 55% more volatile than the S&P 500.

Earnings and Valuation

This table compares Zhihu and Perion Network”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Zhihu	$493.05 million	0.74	-$23.54 million	$0.22	18.89
Perion Network	$424.10 million	0.95	$12.61 million	($0.12)	-74.75

Perion Network has lower revenue, but higher earnings than Zhihu. Perion Network is trading at a lower price-to-earnings ratio than Zhihu, indicating that it is currently the more affordable of the two stocks.

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.

About Perion Network

Perion Network Ltd. provides digital advertising solutions to brands, agencies, and publishers in North America, Europe, and internationally. It offers Wildfire, a content monetization platform; search monetization solutions, including website monetization, search mediation, and app monetization; and cross-channel digital advertising software as a service platform. The company also provides supply management platform; demand management platform for campaign planning and design; analytics platform, which provides information and performance insights; creative platform, a robust media platform; and an AI platform that uses machine learning to bring intelligence to the various phases of campaigns. In addition, it offers an actionable performance monitoring platform to support the various phases of campaign management; an online video player and integrated ad server to upload, manage, and stream video content; content monetization system, which integrates ads within the content layouts at the page level. Further, the company provides a publisher management system that provides analytics and performance optimization tools, as well as reports; search-demand management systems; monetization products that integrate and onboards demand vendors; and AI Systems. Additionally, it offers Intelligent HUB (iHUB), which connects the supply and demand sides of the marketplace; and strategic optimization of relevant traits (SORT), a provisional patent technology that eliminates the need for cookies. The company was formerly known as IncrediMail Ltd. and changed its name to Perion Network Ltd. in November 2011. Perion Network Ltd. was incorporated in 1999 and is headquartered in Holon, Israel.