Alibaba Group (NYSE:BABA) and Amazon.com (NASDAQ:AMZN) are both large-cap retail/wholesale companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, risk, profitability, dividends, earnings and analyst recommendations.
Earnings & Valuation
This table compares Alibaba Group and Amazon.com's top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
Alibaba Group | $71.99 billion | 9.77 | $21.10 billion | $6.03 | 43.12 |
Amazon.com | $280.52 billion | 5.91 | $11.59 billion | $23.01 | 143.72 |
Alibaba Group has higher earnings, but lower revenue than Amazon.com. Alibaba Group is trading at a lower price-to-earnings ratio than Amazon.com, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Alibaba Group and Amazon.com's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
Alibaba Group | 22.56% | 12.74% | 8.50% |
Amazon.com | 4.99% | 24.49% | 7.04% |
Analyst Ratings
This is a summary of recent recommendations and price targets for Alibaba Group and Amazon.com, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
Alibaba Group | 0 | 1 | 23 | 1 | 3.00 |
Amazon.com | 0 | 1 | 47 | 0 | 2.98 |
Alibaba Group currently has a consensus price target of $318.3704, suggesting a potential upside of 22.45%. Amazon.com has a consensus price target of $3,666.5217, suggesting a potential upside of 10.87%. Given Alibaba Group's stronger consensus rating and higher possible upside, equities analysts plainly believe Alibaba Group is more favorable than Amazon.com.
Institutional and Insider Ownership
40.4% of Alibaba Group shares are held by institutional investors. Comparatively, 56.4% of Amazon.com shares are held by institutional investors. 12.5% of Alibaba Group shares are held by company insiders. Comparatively, 16.1% of Amazon.com shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Volatility & Risk
Alibaba Group has a beta of 0.99, indicating that its share price is 1% less volatile than the S&P 500. Comparatively, Amazon.com has a beta of 1.19, indicating that its share price is 19% more volatile than the S&P 500.
Summary
Amazon.com beats Alibaba Group on 8 of the 15 factors compared between the two stocks.