Baidu (NASDAQ:BIDU – Get Free Report) and Zhihu (NYSE:ZH – Get Free Report) are both communication services companies, but which is the better business? We will contrast the two businesses based on the strength of their earnings, profitability, risk, valuation, analyst recommendations, institutional ownership and dividends.
Volatility & Risk
Baidu has a beta of 0.57, suggesting that its share price is 43% less volatile than the S&P 500. Comparatively, Zhihu has a beta of 0.26, suggesting that its share price is 74% less volatile than the S&P 500.
Earnings & Valuation
This table compares Baidu and Zhihu”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Baidu | $18.46 billion | 1.70 | $799.00 million | ($2.11) | -43.81 |
| Zhihu | $393.10 million | 0.77 | -$27.58 million | ($0.55) | -6.39 |
Baidu has higher revenue and earnings than Zhihu. Baidu is trading at a lower price-to-earnings ratio than Zhihu, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a summary of current recommendations for Baidu and Zhihu, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Baidu | 4 | 3 | 15 | 0 | 2.50 |
| Zhihu | 1 | 0 | 0 | 0 | 1.00 |
Baidu presently has a consensus price target of $152.94, suggesting a potential upside of 65.47%. Given Baidu’s stronger consensus rating and higher possible upside, analysts clearly believe Baidu is more favorable than Zhihu.
Insider & Institutional Ownership
28.9% of Zhihu shares are owned by institutional investors. 16.7% of Baidu shares are owned by company insiders. Comparatively, 13.6% of Zhihu shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Profitability
This table compares Baidu and Zhihu’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Baidu | -2.63% | 4.30% | 2.64% |
| Zhihu | -11.33% | -7.71% | -5.75% |
Summary
Baidu beats Zhihu on 11 of the 14 factors compared between the two stocks.
About Baidu
Baidu, Inc. engages in the provision of internet search services in China. It operates through two segments: Baidu Core and iQIYI. The company offers Baidu App to access search, feed, and other services using mobile devices; Baidu Search to access its search and other services; Baidu Feed that provides users with personalized timeline based on their demographics and interests; Baidu Health that helps users to find the doctor and hospital for healthcare needs; and Haokan, a short video app. It also provides Baidu Knows, an online community where users can ask questions to other users; Baidu Wiki; Baidu Experience; Baidu Post; ERNIE Bot, conversational AI bot; Baidu Wenku; Baidu Maps, a voice-enabled mobile app that provides travel-related services; Baidu Drive; Baijiahao; and DuerOS, a smart assistant platform. In addition, it offers online marketing services, which include pay for performance, an auction-based services that allow customers to bid for priority placement of paid sponsored links and reach users who search for information related to their products or services; other marketing services that include display-based marketing services and other online marketing services based on performance criteria other than cost per click; mobile ecosystem, a portfolio of apps, including Baidu App, Haokan, and Baidu Post; various cloud services and solutions, such as platform as a service, software as a service, and infrastructure as a service; self-driving services, including maps, automated valet parking, navigation pilot, electric vehicles, and robotaxi fleets, as well as Xiaodu smart devices. Further, the company provides iQIYI, an online entertainment service, including original and licensed content; other video content and membership; and online advertising services. It has strategic partnership with Zhejiang Geely Holding Group. The company was formerly known as Baidu.com, Inc. Baidu, Inc. was incorporated in 2000 and is headquartered in Beijing, China.
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.
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