GRAVITY (NASDAQ:GRVY) vs. Zhihu (NYSE:ZH) Head to Head Review

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
GRAVITY	12.63%	11.44%	9.68%
Zhihu	-7.25%	-4.83%	-3.60%

Analyst Recommendations

This is a breakdown of current recommendations for GRAVITY and Zhihu, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GRAVITY	0	1	0	0	2.00
Zhihu	1	0	0	0	1.00

Volatility and Risk

GRAVITY has a beta of 1, indicating that its stock price has a similar volatility profile to the S&P 500.Comparatively, Zhihu has a beta of 0.33, indicating that its stock price is 67% less volatile than the S&P 500.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GRAVITY	$388.04 million	1.02	$47.22 million	$7.30	7.77
Zhihu	$393.10 million	0.73	-$27.58 million	($0.36)	-8.96

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

Institutional & Insider Ownership

9.9% of GRAVITY shares are held by institutional investors. Comparatively, 28.9% of Zhihu shares are held by institutional investors. 13.6% of Zhihu shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

GRAVITY beats Zhihu on 9 of the 12 factors compared between the two stocks.

About GRAVITY

Gravity Co., Ltd. develops and publishes online and mobile games worldwide. It offers a massively multiplayer online role-playing game, including Ragnarok Online, Dragonica, Ragnarok Online II, and Ragnarok Landverse. Its mobile games portfolio includes Ragnarok M; Eternal Love; Ragnarok Origin; Ragnarok X: Next Generation; Ragnarok Arena; WITH ISLAND; the Labyrinth of Ragnarok; Ragnarok Poring Merge; Tera Classic; Ragnarok: The Lost Memories; Sadako M; NBA: Rise To Stardom; Milkmaid Of The Milky Way; Generation Zombie; Ragnarok Idle Adventure; Ragnarok 20 Heroes; White Chord; WITH: Whale In The High; Ragnarok Lost Memories; and Paladog Tactics. It also provides console games, such as Ragnarok DS for Nintendo DS; Ragnarok: The Princess of Light and Darkness for PlayStation Portable; Ragnarok Odyssey for PlayStation Vita; Double Dragon II for Xbox 360; Ragnarok Odyssey Ace for PlayStation Vita and PlayStation 3; Pigromance for Steam, Stove, Nintendo Switch, Xbox One, Xbox Series X|S; ALTF4 11 for Steam and Stove; Wetory for Steam, Stove, Nintedo Switch; and GRANDIA HD Collection for Nintendo Switch. In addition, it offers games for IPTV, including Haunted House and Pororo: The Little Penguin, and Kongsuni; and markets dolls, stationery, food, and other character based merchandises, as well as game manuals, monthly magazines, and other publications; PC games, including Puzzle Platformer, ALTF42, Ragnarok ZERO, KAMiBAKO-Mythology of Cube, Psychodemic, and FINAL KNIGHT; social network games and mobile games, such as Ragnarok V: Returns, Ragnarok: The Lost Memories and Ragnrok Begins in-house; and web-browser-based games, such as Ragnarok Prequel and Ragnarok Prequel II. Further, the company provides system development and maintenance services, as well as system integration services to third parties. The company was incorporated in 2000 and is headquartered in Seoul, South Korea. Gravity Co., Ltd. is a subsidiary of GungHo Online Entertainment, Inc.

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.