eBay (NASDAQ: EBAY) and Alibaba Group Holding Limited (NYSE:BABA) are both large-cap retail/wholesale companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, dividends, institutional ownership, earnings, valuation, profitability and analyst recommendations.

Earnings and Valuation

This table compares eBay and Alibaba Group Holding Limited’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
eBay $9.16 billion 4.25 $2.88 billion $6.62 5.49
Alibaba Group Holding Limited $26.40 billion 16.48 $10.92 billion $2.88 59.39

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

Volatility and Risk

eBay has a beta of 1.34, suggesting that its stock price is 34% more volatile than the S&P 500. Comparatively, Alibaba Group Holding Limited has a beta of 2.61, suggesting that its stock price is 161% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations and price targets for eBay and Alibaba Group Holding Limited, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
eBay 2 18 15 0 2.37
Alibaba Group Holding Limited 1 1 30 1 2.94

eBay currently has a consensus target price of $37.17, indicating a potential upside of 2.23%. Alibaba Group Holding Limited has a consensus target price of $167.15, indicating a potential downside of 2.27%. Given eBay’s higher probable upside, equities research analysts clearly believe eBay is more favorable than Alibaba Group Holding Limited.

Profitability

This table compares eBay and Alibaba Group Holding Limited’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
eBay 80.93% 17.50% 7.32%
Alibaba Group Holding Limited 28.77% 16.85% 10.63%

Insider & Institutional Ownership

84.9% of eBay shares are owned by institutional investors. Comparatively, 37.4% of Alibaba Group Holding Limited shares are owned by institutional investors. 6.8% of eBay shares are owned by company insiders. Comparatively, 12.5% of Alibaba Group Holding Limited shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Alibaba Group Holding Limited beats eBay on 10 of the 15 factors compared between the two stocks.

About eBay

eBay Inc. (eBay) is a commerce company, which operates through its Marketplace, StubHub and Classifieds platforms. The Company connects buyers and sellers around the world. Its platforms enable sellers around the world to organize and offer their inventory for sale, and buyers to find and purchase it. Its platforms are accessible through an online experience (desktop and laptop computers), from mobile devices (smartphones and tablets) and by application programming interface (API) (platform access for third-party software developers). The Company’s Marketplace platforms include its online marketplace located at www.ebay.com, localized counterparts and the eBay mobile applications. The Company’s StubHub platforms include its online ticket platform located at www.stubhub.com, the StubHub mobile applications and Ticketbis. The Company’s Classifieds platforms include a collection of brands, such as Mobile.de, Kijiji, Gumtree, Marktplaats, eBay Kleinanzeigen and others.

About Alibaba Group Holding Limited

Alibaba Group Holding Limited is a holding company. Through its subsidiaries, the Company is engaged in online and mobile commerce through offering of products, services and technology that enable merchants, brands and other businesses to transform the way they market, sell and operate in the People’s Republic of China (China) and internationally. Its businesses consist of core commerce, cloud computing, mobile media and entertainment, and other innovation initiatives. Through investee affiliates, it also participates in the logistics and local services sectors. Retail commerce in China operated by the Company includes the China online commerce destination (Taobao Marketplace); the China third-party platform for brands and retailers (Tmall), and the sales and marketing platform for flash sales (Juhuasuan). Wholesale commerce in China operated by the Company includes the China domestic wholesale marketplace (1688.com) and the wholesale marketplace for global trade (Alibaba.com).

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