Zulily (NASDAQ: ZU) and Groupon (NASDAQ:GRPN) are both cyclical consumer goods & services companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, profitabiliy, analyst recommendations, institutional ownership, earnings, valuation and risk.

Profitability

This table compares Zulily and Groupon’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Zulily 1.19% 5.61% 3.17%
Groupon -5.51% -22.40% -3.99%

Valuation and Earnings

This table compares Zulily and Groupon’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Zulily N/A N/A N/A N/A N/A
Groupon $3.12 billion 0.72 $30.64 million ($0.30) -13.30

Groupon has higher revenue and earnings than Zulily.

Institutional & Insider Ownership

57.3% of Groupon shares are held by institutional investors. 23.4% of Groupon shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Zulily and Groupon, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Zulily 0 0 0 0 N/A
Groupon 3 10 4 0 2.06

Groupon has a consensus target price of $4.67, indicating a potential upside of 16.93%. Given Groupon’s higher probable upside, analysts plainly believe Groupon is more favorable than Zulily.

Summary

Groupon beats Zulily on 5 of the 8 factors compared between the two stocks.

Zulily Company Profile

zulily, inc. is an online retailer and standalone e-commerce company in the United States. The Company sources its merchandise from thousands of vendors, including emerging brands and smaller boutique vendors, as well as national brands. The Company operates through two principal segments, including North America segment, which consists of amounts earned from retail and services sales through its United States operated sites, including sales from the sites to customers in the United States, Canada, Australia and other foreign countries, and the United Kingdom segment, which consists of amounts earned from retail and services sales through its United Kingdom operated sites, including sales from the sites to customers in the United Kingdom and other countries in Europe.

Groupon Company Profile

Groupon, Inc. operates online local commerce marketplaces around the world that connect merchants to consumers by offering goods and services at a discount. The Company operates through three segments: North America, which represents the United States and Canada; EMEA, which consists of Europe, and the Middle East and Africa, and the remainder of its international operations (Rest of World). It offers goods and services in three primary categories: Local Deals (Local), Groupon Goods (Goods) and Groupon Getaways (Travel). Its Local category includes offerings from local and national merchants, as well as local events. Its Goods category offers customers the ability to find deals on merchandise across various product lines, including electronics, sporting goods, jewelry, toys, household items and apparel. Through its Travel category, it features travel offers at both discounted and market rates, including hotels, airfare and package deals covering both domestic and international travel.

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