Critical Survey: Alibaba Group Holding Limited (BABA) vs. Overstock.com (OSTK)
Alibaba Group Holding Limited (NYSE: BABA) and Overstock.com (NASDAQ:OSTK) are both retail/wholesale companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, valuation, institutional ownership, risk, profitability, dividends and earnings.
This is a breakdown of current ratings and price targets for Alibaba Group Holding Limited and Overstock.com, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Alibaba Group Holding Limited||1||1||30||1||2.94|
Alibaba Group Holding Limited presently has a consensus target price of $167.24, indicating a potential downside of 4.60%. Overstock.com has a consensus target price of $26.50, indicating a potential upside of 9.50%. Given Overstock.com’s stronger consensus rating and higher possible upside, analysts clearly believe Overstock.com is more favorable than Alibaba Group Holding Limited.
Volatility & Risk
Alibaba Group Holding Limited has a beta of 2.62, meaning that its stock price is 162% more volatile than the S&P 500. Comparatively, Overstock.com has a beta of 0.93, meaning that its stock price is 7% less volatile than the S&P 500.
This table compares Alibaba Group Holding Limited and Overstock.com’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Alibaba Group Holding Limited||28.77%||16.85%||10.63%|
Insider & Institutional Ownership
37.4% of Alibaba Group Holding Limited shares are owned by institutional investors. Comparatively, 44.3% of Overstock.com shares are owned by institutional investors. 28.9% of Overstock.com shares are owned by company 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.
Valuation & Earnings
This table compares Alibaba Group Holding Limited and Overstock.com’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Alibaba Group Holding Limited||$26.40 billion||16.89||$10.92 billion||$2.88||60.87|
|Overstock.com||$1.83 billion||0.33||-$1.70 million||($0.52)||-46.54|
Alibaba Group Holding Limited has higher revenue and earnings than Overstock.com. Overstock.com is trading at a lower price-to-earnings ratio than Alibaba Group Holding Limited, indicating that it is currently the more affordable of the two stocks.
Alibaba Group Holding Limited beats Overstock.com on 10 of the 14 factors compared between the two stocks.
Alibaba Group Holding Limited Company Profile
Alibaba Group Holding Limited is a holding company. Through its subsidiaries, the Company is engaged in online and mobile commerce through offering of products, services and technology that enable merchants, brands and other businesses to transform the way they market, sell and operate in the People’s Republic of China (China) and internationally. Its businesses consist of core commerce, cloud computing, mobile media and entertainment, and other innovation initiatives. Through investee affiliates, it also participates in the logistics and local services sectors. Retail commerce in China operated by the Company includes the China online commerce destination (Taobao Marketplace); the China third-party platform for brands and retailers (Tmall), and the sales and marketing platform for flash sales (Juhuasuan). Wholesale commerce in China operated by the Company includes the China domestic wholesale marketplace (1688.com) and the wholesale marketplace for global trade (Alibaba.com).
Overstock.com Company Profile
Overstock.com, Inc. is an online retailer and incubator of blockchain technology. Through its online retail business, the Company offers a range of price-competitive brand name, non-brand name and closeout products, including furniture, home decor, bedding and bath, housewares, jewelry and watches, apparel and designer accessories, health and beauty products, electronics and computers, and sporting goods. It operates Retail and Medici businesses. Its Retail business consists of its Direct and Partner segments. Its Other segment consists of Medici. The Company also sells various books, magazines, compact discs (CDs), digital versatile discs (DVDs) and video games. The Company sells these products and services through its Internet Websites located at www.overstock.com, www.o.co and www.o.biz. The Company’s other offerings include Worldstock Fair Trade, Main Street Revolution, Farmers Market, Pet Adoptions, Insurance and Supplier Oasis.
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