Zhihu Inc. (NYSE:ZH) Just Released Its First-Quarter Results And Analysts Are Updating Their Estimates

Shareholders might have noticed that Zhihu Inc. (NYSE:ZH) filed its quarterly result this time last week. The early response was not positive, with shares down 2.8% to US$3.82 in the past week. The results were positive, with revenue coming in at CN¥730m, beating analyst expectations by 3.9%. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

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After the latest results, the consensus from Zhihu's seven analysts is for revenues of CN¥3.03b in 2025, which would reflect an uneasy 9.9% decline in revenue compared to the last year of performance. Losses are forecast to balloon 749% to CN¥1.73 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of CN¥3.10b and losses of CN¥2.31 per share in 2025. Although the revenue estimates have not really changed Zhihu'sfuture looks a little different to the past, with a very promising decrease in the loss per share forecasts in particular.

Check out our latest analysis for Zhihu

The average price target held steady at US$5.70, seeming to indicate that business is performing in line with expectations. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Zhihu, with the most bullish analyst valuing it at US$6.61 and the most bearish at US$4.81 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 13% by the end of 2025. This indicates a significant reduction from annual growth of 3.1% over the last three years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 10% annually for the foreseeable future. It's pretty clear that Zhihu's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Zhihu going out to 2027, and you can see them free on our platform here.

We also provide an overview of the Zhihu Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.