Alibaba Group (NYSE:BABA) and Etsy (NASDAQ:ETSY) are both retail/wholesale companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, profitability, institutional ownership, earnings, valuation, dividends and analyst recommendations.

Analyst Recommendations

This is a summary of recent ratings and price targets for Alibaba Group and Etsy, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Alibaba Group 0 0 26 2 3.07
Etsy 1 4 6 0 2.45

Alibaba Group currently has a consensus price target of $226.88, suggesting a potential upside of 54.04%. Etsy has a consensus price target of $44.68, suggesting a potential upside of 7.54%. Given Alibaba Group’s stronger consensus rating and higher probable upside, research analysts clearly believe Alibaba Group is more favorable than Etsy.

Profitability

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

Net Margins Return on Equity Return on Assets
Alibaba Group 20.57% 14.18% 8.61%
Etsy 17.52% 13.23% 6.81%

Insider and Institutional Ownership

38.6% of Alibaba Group shares are owned by institutional investors. Comparatively, 86.7% of Etsy shares are owned by institutional investors. 2.8% of Etsy shares are owned by 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.

Valuation & Earnings

This table compares Alibaba Group and Etsy’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Alibaba Group $39.90 billion 9.45 $10.22 billion $4.03 36.55
Etsy $441.23 million 11.28 $81.80 million $0.38 109.34

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

Risk and Volatility

Alibaba Group has a beta of 2.41, suggesting that its stock price is 141% more volatile than the S&P 500. Comparatively, Etsy has a beta of 0.23, suggesting that its stock price is 77% less volatile than the S&P 500.

Summary

Alibaba Group beats Etsy on 11 of the 15 factors compared between the two stocks.

Alibaba Group Company Profile

Alibaba Group Holding Limited, through its subsidiaries, operates as an online and mobile commerce company in the People's Republic of China and internationally. The company operates in four segments: Core Commerce, Cloud Computing, Digital Media and Entertainment, and Innovation Initiatives and Others. It operates Taobao Marketplace, a mobile commerce destination; Tmall, a third-party platform for brands and retailers; Rural Taobao program that enables rural residents and businesses to sell agricultural products to urban consumers; Juhuasuan, a sales and marketing platform for flash sales; Alibaba.com, an online wholesale marketplace; Alitrip, an online travel booking platform; 1688.com, an online wholesale marketplace; AliExpress, a consumer marketplace; and Hema, a proprietary grocery retail format. The company also provides pay-for-performance and display marketing services through its Alimama marketing technology platform; and Taobao Ad Network and Exchange, a real-time bidding online marketing exchange in China. In addition, it offers cloud computing services, including elastic computing, database, storage and content delivery network, large scale computing, security, and management and application services, as well as big data analytics and a machine learning platform through its Alibaba Cloud Computing platform; Web hosting and domain name registration services; and payment and escrow services, as well as develops and operates mobile Web browsers. The company provides its solutions primarily for businesses. Alibaba Group Holding Limited has strategic collaborations with Driscoll's and Thai Union/Chicken of the Sea to launch their food products to China; and a collaboration agreement with The Hong Kong Polytechnic University. The company was founded in 1999 and is based in Hangzhou, the People's Republic of China.

Etsy Company Profile

Etsy, Inc. operates Etsy.com, a commerce platform to make, sell, and buy goods online and offline primarily in the United States, United Kingdom, Canada, Australia, France, and Germany. It provides various seller services and tools that are designed to help entrepreneurs for starting, managing, and scaling their businesses. The company offers approximately 50 million items across approximately 50 retail categories to buyers. It also provides various seller services, including Etsy payments, a payment processing service; promoted listings, an on-site advertising service that allows sellers to pay for prominent placement of their listings in search results; shipping labels, which allows sellers in the United States and Canada to purchase discounted shipping labels; and pattern, a service that allows sellers to build custom Websites, as well as offers seller tools and education resources to manage the administrative side of their businesses. Etsy, Inc. was founded in 2005 and is headquartered in Brooklyn, New York.

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