Alibaba Group (NYSE:BABA – Get Free Report) and PDD (NASDAQ:PDD – Get Free Report) are both large-cap consumer discretionary companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, institutional ownership, valuation, profitability, risk, analyst recommendations and dividends.
Profitability
This table compares Alibaba Group and PDD’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Alibaba Group | 7.00% | 4.79% | 2.80% |
| PDD | 20.73% | 22.29% | 14.68% |
Insider & Institutional Ownership
13.5% of Alibaba Group shares are held by institutional investors. Comparatively, 39.8% of PDD shares are held by institutional investors. 12.5% of Alibaba Group shares are held by company insiders. Comparatively, 3.7% of PDD shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Valuation & Earnings
This table compares Alibaba Group and PDD”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Alibaba Group | $148.40 billion | 1.70 | $15.02 billion | $4.13 | 24.59 |
| PDD | $61.75 billion | 1.88 | $13.99 billion | $9.08 | 9.00 |
Alibaba Group has higher revenue and earnings than PDD. PDD is trading at a lower price-to-earnings ratio than Alibaba Group, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
Alibaba Group has a beta of 0.47, meaning that its share price is 53% less volatile than the S&P 500. Comparatively, PDD has a beta of -0.05, meaning that its share price is 105% less volatile than the S&P 500.
Analyst Ratings
This is a breakdown of recent recommendations for Alibaba Group and PDD, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Alibaba Group | 0 | 6 | 13 | 2 | 2.81 |
| PDD | 1 | 9 | 6 | 0 | 2.31 |
Alibaba Group currently has a consensus price target of $182.89, indicating a potential upside of 80.07%. PDD has a consensus price target of $110.31, indicating a potential upside of 35.05%. Given Alibaba Group’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Alibaba Group is more favorable than PDD.
Summary
Alibaba Group beats PDD on 9 of the 15 factors compared between the two stocks.
About Alibaba Group
Alibaba Group Holding Limited, through its subsidiaries, provides technology infrastructure and marketing reach to help merchants, brands, retailers, and other businesses to engage with their users and customers in the People's Republic of China and internationally. The company operates through seven segments: China Commerce, International Commerce, Local Consumer Services, Cainiao, Cloud, Digital Media and Entertainment, and Innovation Initiatives and Others. It operates Taobao, a digital retail platform; Tmall, a third-party online and mobile commerce platform; Alimama, a monetization platform; 1688.com and Alibaba.com, which are online wholesale marketplaces; AliExpress, a retail marketplace; Lazada, Trendyol, and Daraz that are e-commerce platforms; Freshippo, a retail platform for groceries and fresh goods; and Tmall Global, an import e-commerce platform. The company also operates Cainiao Network logistic services platform; Ele.me, an on-demand delivery and local services platform; Koubei, a restaurant and local services guide platform; and Fliggy, an online travel platform. In addition, it offers pay-for-performance, in-feed, and display marketing services; and Taobao Ad Network and Exchange, a real-time online bidding marketing exchange. Further, the company provides elastic computing, storage, network, security, database, big data, and IoT services; and hardware, software license, software installation, and application development and maintenance services. Additionally, it operates Youku, an online video platform; Quark, a platform for information search, storage, and consumption; Alibaba Pictures and other content platforms that provide online videos, films, live events, news feeds, literature, music, and others; Amap, a mobile digital map, navigation, and real-time traffic information app; DingTalk, a business efficiency mobile app; and Tmall Genie smart speaker. The company was incorporated in 1999 and is based in Hangzhou, the People's Republic of China.
About PDD
PDD Holdings Inc., a multinational commerce group, owns and operates a portfolio of businesses. It operates Pinduoduo, an e-commerce platform that offers products in various categories, including agricultural produce, apparel, shoes, bags, mother and childcare products, food and beverage, electronic appliances, furniture and household goods, cosmetics and other personal care, sports and fitness items and auto accessories; and Temu, an online marketplace. It focuses on bringing businesses and people into the digital economy. The company was formerly known as Pinduoduo Inc. and changed its name to PDD Holdings Inc. in February 2023. The company was incorporated in 2015 and is based in Dublin, Ireland.
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