Analyzing Zhihu (NYSE:ZH) and Opera (NASDAQ:OPRA)

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

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Opera	0	2	4	0	2.67
Zhihu	1	0	0	0	1.00

Opera currently has a consensus target price of $23.83, indicating a potential upside of 68.08%. Given Opera’s stronger consensus rating and higher possible upside, research analysts plainly believe Opera is more favorable than Zhihu.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Opera	13.93%	8.91%	7.95%
Zhihu	3.41%	2.42%	1.78%

Insider and Institutional Ownership

10.2% of Opera shares are held by institutional investors. Comparatively, 28.9% of Zhihu shares are held by institutional investors. 84.4% of Opera shares are held by company insiders. Comparatively, 13.6% of Zhihu shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility & Risk

Opera has a beta of 1.24, suggesting that its stock price is 24% more volatile than the S&P 500. Comparatively, Zhihu has a beta of 0.24, suggesting that its stock price is 76% less volatile than the S&P 500.

Earnings and Valuation

This table compares Opera and Zhihu”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Opera	$480.65 million	2.64	$80.77 million	$0.90	15.76
Zhihu	$493.05 million	0.63	-$23.54 million	$0.16	22.09

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

Summary

Opera beats Zhihu on 11 of the 14 factors compared between the two stocks.

About Opera

Opera Limited, together with its subsidiaries, provides mobile and PC web browsers and related products and services in Norway and internationally. The company offers mobile browser products, such as Opera Mini, Opera browser for Android and iOS, and Opera GX for PCs and Mobile; Opera Touch; PC browsers, including Opera for Computers and Opera GX; Apex Football; Opera VPN Pro; and Opera News, an AI-powered personalized news discovery and aggregation service. It provides Opera Crypto Browser for PCs and mobile; browser-based cashback rewards programs; owns GameMaker Studio, a 2D gaming development platform; and GXC, a gaming portal. In addition, the company operates Opera Ads, an online advertising platform; and offers Web3 and e-commerce services. Opera Limited was founded in 1995 and is headquartered in Oslo, Norway. Opera Limited is a subsidiary of Kunlun Tech Limited.

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.