Financial Contrast: Baozun (NASDAQ:BZUN) vs. Groupon (NASDAQ:GRPN)

Groupon (NASDAQ:GRPN) and Baozun (NASDAQ:BZUN) are both small-cap consumer discretionary companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, profitability, valuation, risk and earnings.

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%

Volatility and Risk

Groupon has a beta of 0.24, indicating that its stock price is 76% less volatile than the S&P 500. Comparatively, Baozun has a beta of 0.51, indicating that its stock price is 49% less volatile than the S&P 500.

Earnings & Valuation

This table compares Groupon and Baozun”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Groupon	$498.42 million	1.54	-$83.52 million	($3.11)	-6.06
Baozun	$1.42 billion	0.11	-$34.62 million	($0.33)	-8.45

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.

Analyst Recommendations

This is a summary of current recommendations for Groupon and Baozun, as provided by MarketBeat.

	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 presently has a consensus price target of $26.00, indicating a potential upside of 37.86%. Baozun has a consensus price target of $3.80, indicating a potential upside of 36.20%. Given Groupon’s higher possible upside, analysts clearly believe Groupon is more favorable than Baozun.

Institutional & Insider Ownership

90.0% of Groupon shares are owned by institutional investors. Comparatively, 47.3% of Baozun shares are owned by institutional investors. 36.6% of Groupon shares are owned by company insiders. Comparatively, 59.2% of Baozun shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

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.