Financial Contrast: Alibaba Group (NYSE:BABA) and Bed Bath & Beyond (NYSE:BBBY)

Alibaba Group (NYSE:BABA) and Bed Bath & Beyond (NYSE:BBBY) are both retail/wholesale companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, valuation, analyst recommendations, institutional ownership, earnings, dividends and profitability.

Risk and Volatility

Alibaba Group has a beta of 0.5, suggesting that its stock price is 50% less volatile than the S&P 500. Comparatively, Bed Bath & Beyond has a beta of 3.01, suggesting that its stock price is 201% more volatile than the S&P 500.

Profitability

This table compares Alibaba Group and Bed Bath & Beyond’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Alibaba Group	9.12%	7.43%	4.37%
Bed Bath & Beyond	-8.10%	-33.44%	-14.89%

Insider and Institutional Ownership

13.5% of Alibaba Group shares are owned by institutional investors. Comparatively, 76.3% of Bed Bath & Beyond shares are owned by institutional investors. 12.5% of Alibaba Group shares are owned by insiders. Comparatively, 1.8% of Bed Bath & Beyond shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Alibaba Group and Bed Bath & Beyond”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Alibaba Group	$137.30 billion	2.36	$17.93 billion	$5.30	25.60
Bed Bath & Beyond	$1.04 billion	0.37	-$84.62 million	($1.45)	-3.87

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

Analyst Ratings

This is a summary of current ratings and recommmendations for Alibaba Group and Bed Bath & Beyond, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Alibaba Group	1	5	16	0	2.68
Bed Bath & Beyond	1	4	1	0	2.00

Alibaba Group presently has a consensus price target of $187.68, indicating a potential upside of 38.32%. Bed Bath & Beyond has a consensus price target of $7.00, indicating a potential upside of 24.67%. Given Alibaba Group’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Alibaba Group is more favorable than Bed Bath & Beyond.

Summary

Alibaba Group beats Bed Bath & Beyond on 12 of the 14 factors compared between the two stocks.

About Alibaba Group

Alibaba Group Holding Limited, through its subsidiaries, provides technology infrastructure and marketing reach to help merchants, brands, retailers, and other businesses to engage with their users and customers in the People's Republic of China and internationally. The company operates through seven segments: China Commerce, International Commerce, Local Consumer Services, Cainiao, Cloud, Digital Media and Entertainment, and Innovation Initiatives and Others. It operates Taobao, a digital retail platform; Tmall, a third-party online and mobile commerce platform; Alimama, a monetization platform; 1688.com and Alibaba.com, which are online wholesale marketplaces; AliExpress, a retail marketplace; Lazada, Trendyol, and Daraz that are e-commerce platforms; Freshippo, a retail platform for groceries and fresh goods; and Tmall Global, an import e-commerce platform. The company also operates Cainiao Network logistic services platform; Ele.me, an on-demand delivery and local services platform; Koubei, a restaurant and local services guide platform; and Fliggy, an online travel platform. In addition, it offers pay-for-performance, in-feed, and display marketing services; and Taobao Ad Network and Exchange, a real-time online bidding marketing exchange. Further, the company provides elastic computing, storage, network, security, database, big data, and IoT services; and hardware, software license, software installation, and application development and maintenance services. Additionally, it operates Youku, an online video platform; Quark, a platform for information search, storage, and consumption; Alibaba Pictures and other content platforms that provide online videos, films, live events, news feeds, literature, music, and others; Amap, a mobile digital map, navigation, and real-time traffic information app; DingTalk, a business efficiency mobile app; and Tmall Genie smart speaker. The company was incorporated in 1999 and is based in Hangzhou, the People's Republic of China.

About Bed Bath & Beyond

Beyond, Inc. operates as an online retailer of furniture and home furnishings products in the United States and Canada. The company offers furniture, bedding and bath, patio and outdoor gear, area rugs, tabletop and cookware, décor, storage and organization, small appliances, home improvement, and other products under the Bed Bath & Beyond brand. The company provides its products and services through its e-commerce platform accessible through its mobile application, which includes bedbathandbeyond.com, bedbathandbeyond.ca, and overstockgovernment.com. It also offers businesses advertising products or services on its website; Marketplace, a service that allows its partners to sell their products through third party sites; product sales to international customers using third party logistics providers; and Supplier Oasis, a singular integration point that enables partners to manage their products, inventory, and sales channels, as well as access multi-channel fulfillment services through its distribution network. The company was formerly known as Overstock.com, Inc. and changed its name to Beyond, Inc. in November 2023. Beyond, Inc. was founded in 1997 and is headquartered in Midvale, Utah.