Amazon.com (NASDAQ:AMZN) & eBay (NASDAQ:EBAY) Critical Comparison

eBay (NASDAQ:EBAY) and Amazon.com (NASDAQ:AMZN) are both large-cap consumer discretionary companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, institutional ownership, analyst recommendations, risk, valuation, dividends and profitability.

Analyst Ratings

This is a breakdown of recent ratings for eBay and Amazon.com, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
eBay	2	16	17	0	2.43
Amazon.com	0	3	55	2	2.98

eBay presently has a consensus price target of $123.52, suggesting a potential upside of 1.28%. Amazon.com has a consensus price target of $321.74, suggesting a potential upside of 24.08%. Given Amazon.com’s stronger consensus rating and higher possible upside, analysts clearly believe Amazon.com is more favorable than eBay.

Earnings and Valuation

This table compares eBay and Amazon.com”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
eBay	$11.10 billion	4.82	$2.03 billion	$4.58	26.63
Amazon.com	$716.92 billion	3.91	$77.67 billion	$12.37	20.96

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

Insider & Institutional Ownership

87.5% of eBay shares are owned by institutional investors. Comparatively, 72.2% of Amazon.com shares are owned by institutional investors. 0.7% of eBay shares are owned by company insiders. Comparatively, 8.9% of Amazon.com shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

This table compares eBay and Amazon.com’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
eBay	16.84%	49.20%	12.47%
Amazon.com	16.90%	15.72%	7.79%

Volatility and Risk

eBay has a beta of 1.3, meaning that its share price is 30% more volatile than the S&P 500. Comparatively, Amazon.com has a beta of 1.49, meaning that its share price is 49% more volatile than the S&P 500.

Summary

Amazon.com beats eBay on 10 of the 15 factors compared between the two stocks.

About eBay

eBay Inc., together with its subsidiaries, operates marketplace platforms that connect buyers and sellers in the United States, the United Kingdom, China, Germany, and internationally. The company’s marketplace platform includes its online marketplace at ebay.com, off-platform businesses, and the eBay suite of mobile apps. Its platforms enable users to list, sell, and buy various products. The company was founded in 1995 and is headquartered in San Jose, California.

About Amazon.com

Amazon.com, Inc. engages in the retail sale of consumer products, advertising, and subscriptions service through online and physical stores in North America and internationally. The company operates through three segments: North America, International, and Amazon Web Services (AWS). It also manufactures and sells electronic devices, including Kindle, Fire tablets, Fire TVs, Echo, Ring, Blink, and eero; and develops and produces media content. In addition, the company offers programs that enable sellers to sell their products in its stores; and programs that allow authors, independent publishers, musicians, filmmakers, Twitch streamers, skill and app developers, and others to publish and sell content. Further, it provides compute, storage, database, analytics, machine learning, and other services, as well as advertising services through programs, such as sponsored ads, display, and video advertising. Additionally, the company offers Amazon Prime, a membership program. The company's products offered through its stores include merchandise and content purchased for resale and products offered by third-party sellers. It serves consumers, sellers, developers, enterprises, content creators, advertisers, and employees. Amazon.com, Inc. was incorporated in 1994 and is headquartered in Seattle, Washington.