Weibo (NASDAQ:WB) & Zillow Group (NASDAQ:Z) Critical Comparison

Weibo (NASDAQ:WB) and Zillow Group (NASDAQ:Z) are both communication services companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, earnings, risk, institutional ownership, profitability, analyst recommendations and valuation.

Insider and Institutional Ownership

68.8% of Weibo shares are held by institutional investors. Comparatively, 71.0% of Zillow Group shares are held by institutional investors. 41.3% of Weibo shares are held by insiders. Comparatively, 25.0% of Zillow Group shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and price targets for Weibo and Zillow Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Weibo	3	2	1	0	1.67
Zillow Group	1	7	5	1	2.43

Weibo presently has a consensus target price of $8.80, suggesting a potential upside of 34.56%. Zillow Group has a consensus target price of $61.29, suggesting a potential upside of 111.26%. Given Zillow Group’s stronger consensus rating and higher possible upside, analysts plainly believe Zillow Group is more favorable than Weibo.

Profitability

This table compares Weibo and Zillow Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Weibo	17.78%	8.87%	4.96%
Zillow Group	1.96%	2.32%	1.97%

Volatility and Risk

Weibo has a beta of 0.17, suggesting that its stock price is 83% less volatile than the S&P 500. Comparatively, Zillow Group has a beta of 2.04, suggesting that its stock price is 104% more volatile than the S&P 500.

Earnings and Valuation

This table compares Weibo and Zillow Group”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Weibo	$1.76 billion	0.91	$449.02 million	$1.21	5.40
Zillow Group	$2.58 billion	2.53	$23.00 million	$0.22	131.86

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

Summary

Zillow Group beats Weibo on 9 of the 15 factors compared between the two stocks.

About Weibo

Weibo Corporation, through its subsidiaries, operates as a social media platform for people to create, discover, and distribute content in the People’s Republic of China. It operates in two segments, Advertising and Marketing Services; and Value-Added Services. The company offers discovery products to help users discover content on its platform; self-expression products that enable its users to express themselves on its platform; and social products to promote social interaction between users on its platform. It also provides advertising and marketing solutions, such as social display advertisements; and promoted marketing offerings, such as Fans Headline and Weibo Express promoted feeds, as well as promoted trends and search products that appear alongside user’s trends discovery and search behaviors. In addition, the company offers products, such as trends, search, video/live streaming, and editing tools; content customization, copyright contents pooling, and user interaction development; and search list recommendation, trends list recommendation, and Weibo app opening advertisements. Further, it provides back-end management, traffic support, and product services for better displaying and promotion of its account and content; open application platform for other app developers that allows users to log into third-party applications with their Weibo account for sharing third-party content on its platform; and Weibo Wallet, a product that enables platform partners to conduct interest generation activities on Weibo, such as handing out red envelops and coupons. The company was formerly known as T.CN Corporation and changed its name to Weibo Corporation in 2012. The company was founded in 2009 and is headquartered in Beijing, the People’s Republic of China.

About Zillow Group

Zillow Group, Inc. operates real estate brands in mobile applications and Websites in the United States. The company offers premier agent and rentals marketplaces, new construction marketplaces, advertising, display advertising, and business technology solutions, as well as dotloop and floor plans. It also provides mortgage originations and the sale of mortgages, and advertising to mortgage lenders and other mortgage professionals; and title and escrow services. In addition, the company's brand portfolio includes Zillow Premier Agent, Zillow Home Loans, Zillow Rentals, Trulia, StreetEasy, HotPads, and Out East; and a suite of marketing software and technology solutions for the real estate industry, including ShowingTime+, Spruce, and Follow Up Boss. Zillow Group, Inc. was incorporated in 2004 and is headquartered in Seattle, Washington.