Zhihu (NYSE:ZH) Issues Earnings Results, Misses Estimates By $0.06 EPS

Zhihu (NYSE:ZH) posted its quarterly earnings results on Wednesday. The company reported ($0.07) earnings per share (EPS) for the quarter, missing the consensus estimate of ($0.01) by ($0.06), Zacks reports. The firm had revenue of $101.57 million for the quarter, compared to the consensus estimate of $104.60 million. Zhihu had a negative return on equity of 4.83% and a negative net margin of 7.25%.

Here are the key takeaways from Zhihu’s conference call:

• Revenue was RMB690.1 million, down 3.7% year over year but up 5.9% sequentially, as paid content and IP operations helped offset continued weakness in marketing services. Monthly subscribing members remained stable at 13.1 million.
• Zhihu reported a RMB37.4 million net loss and a RMB10.3 million adjusted net loss, while gross margin declined to 57% from 62.5% a year earlier. Management warned that quarterly profitability may fluctuate as it invests in new initiatives and that marketing recovery remains structural rather than linear.
• IP licensing continued to gain momentum, with licensing cooperation up 105% sequentially and more than sixfold year over year. Management said AI-generated comic dramas can extend the life cycle and improve monetization of Zhihu’s original story library, while maintaining a flexible, relatively disciplined approach to production investment.
• Zhihu is expanding AI initiatives across AI search, community agents, content-asset services and expert data solutions; its AI Works platform hosts more than 2,600 projects and its open-data platform has attracted over 17,600 developers. Management emphasized that these businesses remain early-stage and have not yet produced stable, scalable revenue.
• Operating expenses fell 13% year over year, and the company ended June with RMB4.4 billion in cash and liquid investments. Zhihu repurchased 6.5 million Class A shares during the quarter and said it will continue disciplined capital allocation and share repurchases.

Zhihu Stock Performance

Shares of ZH opened at $3.09 on Thursday. Zhihu has a 52 week low of $2.57 and a 52 week high of $5.55. The firm has a market cap of $267.44 million, a P/E ratio of -8.58 and a beta of 0.28. The firm’s 50-day simple moving average is $3.19 and its 200 day simple moving average is $3.21.

Hedge Funds Weigh In On Zhihu

A hedge fund recently raised its stake in Zhihu stock. Ameriprise Financial Inc. increased its position in shares of Zhihu Inc. Sponsored ADR (NYSE:ZH) by 44.3% in the 3rd quarter, according to the company in its most recent 13F filing with the Securities and Exchange Commission. The fund owned 36,088 shares of the company’s stock after purchasing an additional 11,082 shares during the period. Ameriprise Financial Inc.’s holdings in Zhihu were worth $183,000 as of its most recent filing with the Securities and Exchange Commission. Hedge funds and other institutional investors own 28.92% of the company’s stock.

Analyst Upgrades and Downgrades

A number of equities research analysts have recently issued reports on the stock. Wall Street Zen raised shares of Zhihu from a “sell” rating to a “hold” rating in a report on Saturday, June 6th. Weiss Ratings restated a “sell (d-)” rating on shares of Zhihu in a research note on Friday, July 17th. One equities research analyst has rated the stock with a Sell rating, According to data from MarketBeat, the company presently has a consensus rating of “Sell”.

About Zhihu

Zhihu is China’s leading online question-and-answer platform, providing a space where users can ask questions, share knowledge, and engage with content across science, technology, business, culture, and lifestyle. Founded in 2011 and headquartered in Beijing, Zhihu has cultivated a community-driven environment that emphasizes credible, in-depth answers from experts, professionals, and enthusiasts.

The company’s core service revolves around its Q&A platform, enabling registered users to post questions and receive comprehensive responses.