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

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

Valuation & Earnings

This table compares Perion Network 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
Perion Network	$424.10 million	0.95	$12.61 million	($0.12)	-75.25
Zhihu	$3.15 billion	0.12	-$23.54 million	$0.22	19.14

Perion Network has higher earnings, but lower revenue 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.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Perion Network and Zhihu, as provided by MarketBeat.

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

Perion Network currently has a consensus target price of $14.00, suggesting a potential upside of 55.04%. Zhihu has a consensus target price of $4.70, suggesting a potential upside of 11.64%. Given Perion Network’s stronger consensus rating and higher possible upside, analysts clearly believe Perion Network is more favorable than Zhihu.

Volatility and Risk

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

Institutional & Insider Ownership

68.1% of Perion Network shares are held by institutional investors. Comparatively, 28.9% of Zhihu shares are held by institutional investors. 2.8% of Perion Network 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 company is poised for long-term growth.

Profitability

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

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

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.

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.