Reviewing Amazon.com (NASDAQ:AMZN) and Groupon (NASDAQ:GRPN)

Amazon.com (NASDAQ:AMZN) and Groupon (NASDAQ:GRPN) are both retail/wholesale companies, but which is the superior stock? We will contrast the two companies based on the strength of their dividends, analyst recommendations, institutional ownership, valuation, earnings, profitability and risk.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Amazon.com and Groupon, as provided by MarketBeat.

	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 currently 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 possible upside, analysts plainly believe Groupon is more favorable than Amazon.com.

Earnings and Valuation

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

	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 and Risk

Amazon.com has a beta of 1.44, indicating that its share price is 44% more volatile than the S&P 500. Comparatively, Groupon has a beta of 0.25, indicating that its share price is 75% less volatile than the S&P 500.

Insider and Institutional Ownership

72.2% of Amazon.com shares are owned by institutional investors. Comparatively, 90.1% of Groupon shares are owned by institutional investors. 8.9% of Amazon.com shares are owned by insiders. Comparatively, 36.6% of Groupon shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers 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.