Travelzoo (NASDAQ:TZOO – Get Free Report) and Zhihu (NYSE:ZH – Get Free Report) are both small-cap communication services companies, but which is the superior business? We will compare the two companies based on the strength of their risk, analyst recommendations, valuation, profitability, dividends, earnings and institutional ownership.
Analyst Ratings
This is a summary of recent recommendations and price targets for Travelzoo and Zhihu, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Travelzoo | 1 | 1 | 2 | 0 | 2.25 |
| Zhihu | 1 | 0 | 0 | 0 | 1.00 |
Travelzoo currently has a consensus target price of $13.83, suggesting a potential upside of 172.85%. Given Travelzoo’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Travelzoo is more favorable than Zhihu.
Profitability
This table compares Travelzoo and Zhihu’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Travelzoo | 0.51% | -9.35% | 1.00% |
| Zhihu | -11.33% | -7.71% | -5.75% |
Institutional & Insider Ownership
27.4% of Travelzoo shares are held by institutional investors. Comparatively, 28.9% of Zhihu shares are held by institutional investors. 45.3% of Travelzoo shares are held by insiders. Comparatively, 13.6% of Zhihu shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
Valuation & Earnings
This table compares Travelzoo and Zhihu”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Travelzoo | $92.15 million | 0.56 | $4.70 million | $0.03 | 169.00 |
| Zhihu | $393.10 million | 0.75 | -$27.58 million | ($0.55) | -6.16 |
Travelzoo has higher earnings, but lower revenue than Zhihu. Zhihu is trading at a lower price-to-earnings ratio than Travelzoo, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Travelzoo has a beta of 1.36, meaning that its share price is 36% more volatile than the S&P 500. Comparatively, Zhihu has a beta of 0.22, meaning that its share price is 78% less volatile than the S&P 500.
Summary
Travelzoo beats Zhihu on 10 of the 14 factors compared between the two stocks.
About Travelzoo
Travelzoo, together with its subsidiaries, operates as an Internet media company that provides travel, entertainment, and local experiences worldwide. It operates in four segments: Travelzoo North America, Travelzoo Europe, Jack's Flight Club, and New Initiatives. The company offers Travelzoo website, Travelzoo Top 20 email newsletters, Standalone email newsletters, Travelzoo Network, Travelzoo mobile applications, Jack's Flight Club website, Jack's Flight Club mobile applications, and Jack's Flight Club newsletters. The company's Travelzoo website and newsletters include local deals and getaways listings that allow members to purchase vouchers for offers from local businesses, such as spas, hotels, and restaurants; Jack's Flight Club, a subscription service that provides members with information about exceptional airfares; and Travelzoo Network, a network of third-party websites that list travel deals published by the company. It serves airlines, hotels, cruise lines, vacations packagers, tour operators, destinations, car rental companies, travel agents, theater and performing arts groups, restaurants, spas, and activity companies. Travelzoo Inc. was incorporated in 1998 and is headquartered in New York, New York.
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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