Analyzing RideNow Group (NASDAQ:RDNW) and Groupon (NASDAQ:GRPN)

RideNow Group (NASDAQ:RDNW) and Groupon (NASDAQ:GRPN) are both small-cap retail/wholesale companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, profitability, risk, dividends, earnings and valuation.

Institutional and Insider Ownership

66.1% of RideNow Group shares are owned by institutional investors. Comparatively, 90.1% of Groupon shares are owned by institutional investors. 54.7% of RideNow Group shares are owned by company insiders. Comparatively, 35.7% of Groupon shares are owned 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.

Earnings & Valuation

This table compares RideNow Group and Groupon”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
RideNow Group	$1.08 billion	0.22	-$52.40 million	($1.39)	-4.53
Groupon	$498.42 million	0.94	-$83.52 million	($2.12)	-5.40

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

Profitability

This table compares RideNow Group and Groupon’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
RideNow Group	-4.84%	-2,628.57%	-2.61%
Groupon	-16.76%	-717.37%	-13.09%

Volatility and Risk

RideNow Group has a beta of 1.25, suggesting that its share price is 25% more volatile than the S&P 500. Comparatively, Groupon has a beta of -0.02, suggesting that its share price is 102% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and target prices for RideNow Group and Groupon, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
RideNow Group	1	2	0	0	1.67
Groupon	2	1	2	0	2.00

RideNow Group presently has a consensus target price of $6.50, suggesting a potential upside of 3.34%. Groupon has a consensus target price of $33.67, suggesting a potential upside of 194.03%. Given Groupon’s stronger consensus rating and higher probable upside, analysts plainly believe Groupon is more favorable than RideNow Group.

Summary

RideNow Group beats Groupon on 7 of the 13 factors compared between the two stocks.

About RideNow Group

RumbleOn, Inc. primarily operates as a powersports retailer in the United States. It operates in two segments, Powersports and Vehicle Transportation Services. The Powersports segment provides new and pre-owned motorcycles, all-terrain vehicles, utility terrain or side-by-side vehicles, personal watercraft, snowmobiles, and other powersports products. It also offers parts, apparel, accessories, finance and insurance products and services, and aftermarket products, as well as repair and maintenance services. The Vehicle Transportation Services segment provides asset-light transportation brokerage services facilitating automobile transportation. The company was formerly known as Smart Server, Inc. and changed its name to RumbleOn, Inc. in February 2017. The company was incorporated in 2013 and is based in Irving, Texas.

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.