Contrasting Travelzoo (NASDAQ:TZOO) & Zhihu (NYSE:ZH)

Travelzoo (NASDAQ:TZOO) and Zhihu (NYSE:ZH) are both small-cap communication services companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitability, dividends, valuation, institutional ownership, analyst recommendations, earnings and risk.

Earnings and Valuation

This table compares Travelzoo and Zhihu”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Travelzoo	$92.15 million	0.54	$4.70 million	$0.03	163.67
Zhihu	$2.64 billion	0.11	-$27.58 million	($0.55)	-5.88

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.

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%

Risk & Volatility

Travelzoo has a beta of 1.36, suggesting that its share price is 36% more volatile than the S&P 500. Comparatively, Zhihu has a beta of 0.22, suggesting that its share price is 78% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings for Travelzoo and Zhihu, as provided 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 price target of $13.83, indicating a potential upside of 181.74%. Given Travelzoo’s stronger consensus rating and higher possible upside, equities analysts clearly believe Travelzoo is more favorable than Zhihu.

Insider and Institutional 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 endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

Travelzoo beats Zhihu on 11 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.