Comparing Zillow Group (NASDAQ:ZG) and Hello Group (NASDAQ:MOMO)

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

Volatility & Risk

Hello Group has a beta of 0.32, indicating that its share price is 68% less volatile than the S&P 500. Comparatively, Zillow Group has a beta of 1.95, indicating that its share price is 95% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations for Hello Group and Zillow Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hello Group	1	1	1	0	2.00
Zillow Group	2	12	9	0	2.30

Hello Group presently has a consensus price target of $9.05, suggesting a potential upside of 103.14%. Zillow Group has a consensus price target of $47.67, suggesting a potential upside of 61.39%. Given Hello Group’s higher probable upside, analysts plainly believe Hello Group is more favorable than Zillow Group.

Valuation and Earnings

This table compares Hello Group and Zillow Group”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hello Group	$10.10 billion	0.05	$114.97 million	$0.98	4.55
Zillow Group	$2.58 billion	2.57	$23.00 million	($0.52)	-56.80

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Hello Group	11.02%	10.43%	8.41%
Zillow Group	-3.95%	3.23%	2.67%

Institutional and Insider Ownership

51.0% of Hello Group shares are owned by institutional investors. Comparatively, 20.3% of Zillow Group shares are owned by institutional investors. 61.4% of Hello Group shares are owned by company insiders. Comparatively, 29.9% of Zillow Group shares are owned 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.

Summary

Hello Group beats Zillow Group on 10 of the 14 factors compared between the two stocks.

About Hello Group

Hello Group Inc., formerly known as Momo Inc., is a China-based mobile social and entertainment company. Founded in 2011, it operates Momo, a platform that helps users connect and interact, and Tantan, a dating app acquired by the company in 2018. The company offers social discovery and communication features, along with services such as live streaming and other paid in-app offerings. Its platforms primarily serve users in China. Hello Group is headquartered in Beijing. Founder Tang Yan serves as chairman, and Wang Li has served as the company’s chief executive officer.

About Zillow Group

Zillow Group, Inc. operates a digital real estate marketplace focused primarily on the United States. Its websites and mobile apps help consumers find homes for sale and rent, explore neighborhood information, and research home values. The company’s brands include Zillow, Trulia, StreetEasy and HotPads. Zillow Group also provides services for real estate professionals, including advertising and customer-management tools, and offers mortgage services through Zillow Home Loans. Zillow launched in 2006, founded by Rich Barton and Lloyd Frink, and grew into a parent company with multiple real estate brands and services.