Contrasting CoStar Group (NASDAQ:CSGP) and Zhihu (NYSE:ZH)

CoStar Group (NASDAQ:CSGP) and Zhihu (NYSE:ZH) are both computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, earnings, valuation, analyst recommendations, dividends, risk and institutional ownership.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
CoStar Group	11.64%	4.97%	4.08%
Zhihu	-20.00%	-16.32%	-11.54%

Institutional and Insider Ownership

96.6% of CoStar Group shares are owned by institutional investors. Comparatively, 28.9% of Zhihu shares are owned by institutional investors. 1.6% of CoStar Group shares are owned by insiders. Comparatively, 13.6% of Zhihu shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Volatility & Risk

CoStar Group has a beta of 0.84, meaning that its share price is 16% less volatile than the S&P 500. Comparatively, Zhihu has a beta of 0.28, meaning that its share price is 72% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and target prices for CoStar Group and Zhihu, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CoStar Group	0	3	12	0	2.80
Zhihu	0	0	0	0	N/A

CoStar Group presently has a consensus target price of $102.46, indicating a potential upside of 13.42%. Given CoStar Group’s higher possible upside, equities analysts clearly believe CoStar Group is more favorable than Zhihu.

Earnings and Valuation

This table compares CoStar Group and Zhihu’s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CoStar Group	$2.46 billion	15.03	$374.70 million	$0.73	123.75
Zhihu	$591.40 million	0.68	-$118.82 million	($0.19)	-3.42

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

Summary

CoStar Group beats Zhihu on 12 of the 13 factors compared between the two stocks.

About CoStar Group

CoStar Group, Inc. provides information, analytics, and online marketplace services to the commercial real estate, hospitality, residential, and related professionals industries in the United States, Canada, Europe, the Asia Pacific, and Latin America. The company offers CoStar Property that provides inventory of office, industrial, retail, multifamily, hospitality, and student housing properties and land; CoStar Sales, a robust database of comparable commercial real estate sales transactions; CoStar Market Analytics to view and report on aggregated market and submarket trends; and CoStar Tenant, an online business-to-business prospecting and analytical tool that provides tenant information. It also provides Leasing, a tool to capture, manage, and maintain lease data; CoStar Lease Analysis; Public Record, a searchable database of commercially zoned parcels; CoStar Real Estate Manager, a real estate lease administration, portfolio management, and lease accounting compliance software solution; and CoStar Risk Analytics and CoStar Investment. In addition, it offers apartment marketing sites, such as ApartmentFinder.com, ForRent.com, ApartmentHomeLiving.com, WestsideRentals.com, AFTER55.com, CorporateHousing.com, ForRentUniversity.com, Apartamentos.com, and Off Campus Partners; LoopNet Premium Lister; LoopNet Diamond, Platinum, and Gold Ads; LandsofAmerica.com, LandAndFarm.com, and LandWatch.com for rural land for-sale; BizBuySell.com, BizQuest.com, and FindaFranchise.com for operating businesses and franchises for-sale; Ten-X, an online auction platform for commercial real estate; and HomeSnap, an online and mobile software platform, as well as Homes.com, a homes for sale listings site. The company was founded in 1987 and is headquartered in Washington, the District of Columbia.

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 also offers technology, business support, and consulting services; information transmission, software, and information technology services; 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.