Amazon.com (NASDAQ:AMZN – Get Free Report) and Groupon (NASDAQ:GRPN – Get Free Report) are both retail/wholesale companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, valuation, risk, analyst recommendations, institutional ownership, earnings and profitability.
Analyst Ratings
This is a breakdown of recent ratings and price targets for Amazon.com and Groupon, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Amazon.com | 0 | 3 | 57 | 0 | 2.95 |
| Groupon | 2 | 1 | 3 | 0 | 2.17 |
Amazon.com presently has a consensus price target of $312.52, indicating a potential upside of 31.31%. Groupon has a consensus price target of $28.67, indicating a potential upside of 78.16%. Given Groupon’s higher probable upside, analysts clearly believe Groupon is more favorable than Amazon.com.
Valuation and Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Amazon.com | $716.92 billion | 3.57 | $77.67 billion | $8.36 | 28.47 |
| Groupon | $498.42 million | 1.23 | -$83.52 million | ($2.61) | -6.16 |
Amazon.com has higher revenue and earnings than Groupon. Groupon is trading at a lower price-to-earnings ratio than Amazon.com, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
Amazon.com has a beta of 1.44, meaning that its share price is 44% more volatile than the S&P 500. Comparatively, Groupon has a beta of 0.25, meaning that its share price is 75% less volatile than the S&P 500.
Insider & Institutional Ownership
72.2% of Amazon.com shares are held by institutional investors. Comparatively, 90.1% of Groupon shares are held by institutional investors. 8.9% of Amazon.com shares are held by insiders. Comparatively, 36.6% of Groupon shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Profitability
This table compares Amazon.com and Groupon’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Amazon.com | 12.22% | 19.92% | 9.86% |
| Groupon | -20.78% | -717.37% | -16.40% |
Summary
Amazon.com beats Groupon on 11 of the 14 factors compared between the two stocks.
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.
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.
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