eBay (NASDAQ:EBAY) and Pinduoduo (NASDAQ:PDD) are both large-cap retail/wholesale companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, risk, analyst recommendations, earnings, institutional ownership, valuation and dividends.

Analyst Recommendations

This is a summary of current ratings and price targets for eBay and Pinduoduo, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
eBay 1 14 14 0 2.45
Pinduoduo 0 2 7 0 2.78

eBay currently has a consensus price target of $40.12, suggesting a potential upside of 9.68%. Pinduoduo has a consensus price target of $29.95, suggesting a potential upside of 39.17%. Given Pinduoduo’s stronger consensus rating and higher probable upside, analysts clearly believe Pinduoduo is more favorable than eBay.

Profitability

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

Net Margins Return on Equity Return on Assets
eBay 24.43% 31.26% 8.61%
Pinduoduo -78.51% -114.98% -32.83%

Valuation & Earnings

This table compares eBay and Pinduoduo’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
eBay $10.75 billion 2.97 $2.53 billion $2.32 15.77
Pinduoduo $1.91 billion 12.49 -$1.49 billion ($2.00) -10.76

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

Dividends

eBay pays an annual dividend of $0.56 per share and has a dividend yield of 1.5%. Pinduoduo does not pay a dividend. eBay pays out 24.1% of its earnings in the form of a dividend.

Institutional and Insider Ownership

91.1% of eBay shares are owned by institutional investors. Comparatively, 7.0% of Pinduoduo shares are owned by institutional investors. 6.2% of eBay 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.

Summary

eBay beats Pinduoduo on 11 of the 15 factors compared between the two stocks.

eBay Company Profile

eBay Inc. operates commerce platforms connecting various buyers and sellers worldwide. The company's Marketplace platforms include its online marketplace at ebay.com and the eBay suite of mobile apps; and StubHub platforms comprise its online ticket platform at stubhub.com, and the StubHub mobile apps that connect fans with their favorite sporting events, shows, and artists, as well as enables them to buy and sell tickets. Its Classifieds platforms include a collection of brands, such as mobile.de, Kijiji, Gumtree, Marktplaats, eBay Kleinanzeigen, and others, which offer online classifieds to enable people find whatever they are looking for in their local communities. The company's platforms enable users to list, buy, sell, and pay for items through various online, mobile, and offline channels that include retailers, distributors, liquidators, import and export companies, auctioneers, catalog and mail-order companies, classifieds, directories, search engines, commerce participants, shopping channels, and networks. eBay Inc. was founded in 1995 and is headquartered in San Jose, California.

Pinduoduo Company Profile

Pinduoduo Inc. operates an e-commerce platform in the People's Republic of China. It also operates Pinduoduo, a mobile platform that offers a range of priced merchandise. The company was formerly known as Walnut Street Group Holding Limited and changed its name to Pinduoduo Inc. in July 2018. Pinduoduo Inc. was founded in 2015 and is based in Shanghai, the People's Republic of China.

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