Groupon (NASDAQ:GRPN – Get Free Report) and Baozun (NASDAQ:BZUN – Get Free Report) are both small-cap consumer discretionary companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, profitability, valuation, dividends and risk.
Insider and Institutional Ownership
90.0% of Groupon shares are held by institutional investors. Comparatively, 47.3% of Baozun shares are held by institutional investors. 36.6% of Groupon shares are held by insiders. Comparatively, 59.2% of Baozun shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Earnings & Valuation
This table compares Groupon and Baozun”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Groupon | $498.42 million | 1.59 | -$83.52 million | ($3.11) | -6.28 |
| Baozun | $1.42 billion | 0.12 | -$34.62 million | ($0.33) | -9.15 |
Baozun has higher revenue and earnings than Groupon. Baozun is trading at a lower price-to-earnings ratio than Groupon, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Groupon has a beta of 0.23, suggesting that its share price is 77% less volatile than the S&P 500. Comparatively, Baozun has a beta of 0.51, suggesting that its share price is 49% less volatile than the S&P 500.
Analyst Recommendations
This is a summary of current ratings and target prices for Groupon and Baozun, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Groupon | 2 | 1 | 1 | 0 | 1.75 |
| Baozun | 1 | 1 | 2 | 0 | 2.25 |
Groupon currently has a consensus target price of $26.00, suggesting a potential upside of 33.13%. Baozun has a consensus target price of $3.80, suggesting a potential upside of 25.83%. Given Groupon’s higher possible upside, research analysts clearly believe Groupon is more favorable than Baozun.
Profitability
This table compares Groupon and Baozun’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Groupon | -25.26% | N/A | -20.28% |
| Baozun | -1.26% | 2.55% | 1.43% |
Summary
Baozun beats Groupon on 10 of the 14 factors compared between the two stocks.
About Groupon
Groupon, Inc., together with its subsidiaries, operates a marketplace that connects consumers to merchants. It operates in two segments, North America and International. The company sells goods or services on behalf of third-party merchants. It serves customers through its mobile applications and websites. The company was formerly known as ThePoint.com, Inc. and changed its name to Groupon, Inc. in October 2008. Groupon, Inc. was incorporated in 2008 and is headquartered in Chicago, Illinois.
About Baozun
Baozun Inc., through its subsidiaries, provides end-to-end e-commerce solutions to brand partners in the People’s Republic of China. The company operates through two segments, E-Commerce and Brand Management (BBM). The E-Commerce segment offers brands’ store operations, customer services and value-added services in logistics and supply chain management, IT, and digital marketing. The Brand Management segment provides brand management, strategic and tactic positioning, branding and marketing, retail and e-commerce operations, supply chain, and logistics and technology services. It serves brand partners in various categories, including apparel and accessories, appliances, electronics, home and furnishings, food and health products, beauty and cosmetics, fast moving consumer goods, mother and baby products, and automobiles. The company was formerly known as Baozun Cayman Inc. and changed its name to Baozun Inc. in March 2015. Baozun Inc. was founded in 2007 and is headquartered in Shanghai, the People’s Republic of China.
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