JD.com (NASDAQ:JD – Get Free Report) and Groupon (NASDAQ:GRPN – Get Free Report) are both retail/wholesale companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, valuation, analyst recommendations, dividends, risk, institutional ownership and earnings.
Profitability
This table compares JD.com and Groupon’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| JD.com | 2.46% | 10.99% | 4.80% |
| Groupon | -28.52% | -717.37% | -22.78% |
Institutional and Insider Ownership
16.0% of JD.com shares are held by institutional investors. Comparatively, 90.1% of Groupon shares are held by institutional investors. 16.6% of JD.com shares are held by company insiders. Comparatively, 35.7% of Groupon shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Analyst Ratings
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| JD.com | 1 | 6 | 10 | 1 | 2.61 |
| Groupon | 2 | 1 | 4 | 0 | 2.29 |
JD.com currently has a consensus target price of $38.67, indicating a potential upside of 30.94%. Groupon has a consensus target price of $29.80, indicating a potential upside of 72.15%. Given Groupon’s higher possible upside, analysts plainly believe Groupon is more favorable than JD.com.
Volatility & Risk
JD.com has a beta of 0.4, indicating that its share price is 60% less volatile than the S&P 500. Comparatively, Groupon has a beta of 0.02, indicating that its share price is 98% less volatile than the S&P 500.
Valuation and Earnings
This table compares JD.com and Groupon”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| JD.com | $158.76 billion | 0.27 | $5.67 billion | $2.94 | 10.04 |
| Groupon | $492.56 million | 1.43 | -$59.03 million | ($3.49) | -4.96 |
JD.com has higher revenue and earnings than Groupon. Groupon is trading at a lower price-to-earnings ratio than JD.com, indicating that it is currently the more affordable of the two stocks.
Summary
JD.com beats Groupon on 11 of the 15 factors compared between the two stocks.
About JD.com
JD.com, Inc. operates as a supply chain-based technology and service provider in the People's Republic of China. The company offers computers, communication, and consumer electronics products, as well as home appliances; and general merchandise products comprising food, beverage and fresh produce, baby and maternity products, furniture and household goods, cosmetics and other personal care items, pharmaceutical and healthcare products, industrial products, books, automobile accessories, apparel and footwear, bags, and jewelry. It also provides online marketplace services for third-party merchants; marketing services; and omni-channel solutions to customers and offline retailers, as well as online healthcare services. In addition, the company develops, owns, and manages its logistics facilities and other real estate properties to support third parties; offers asset management services and integrated service platform; leasing of storage facilities and related management services; and engages in online retail business. Further, it provides integrated data, technology, business, and user management industry solutions to support the digitization of enterprises and institutions; and technology-driven supply chain solutions and logistics services. The company was formerly known as 360buy Jingdong Inc. and changed its name to JD.com, Inc. in January 2014. JD.com, Inc. was incorporated in 2006 and is headquartered in Beijing, the People's Republic of China.
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.
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