Critical Analysis: Groupon (NASDAQ:GRPN) versus Ryohin Keikaku (OTCMKTS:RYKKY)

Ryohin Keikaku (OTCMKTS:RYKKY) and Groupon (NASDAQ:GRPN) are both consumer discretionary companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, risk, earnings, institutional ownership, profitability, dividends and analyst recommendations.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Ryohin Keikaku and Groupon, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ryohin Keikaku	0	1	0	0	2.00
Groupon	2	1	1	0	1.75

Groupon has a consensus target price of $26.00, indicating a potential upside of 32.72%. Given Groupon’s higher possible upside, analysts clearly believe Groupon is more favorable than Ryohin Keikaku.

Institutional and Insider Ownership

90.0% of Groupon shares are owned by institutional investors. 36.6% of Groupon shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Ryohin Keikaku	N/A	N/A	N/A
Groupon	-25.26%	N/A	-20.28%

Earnings & Valuation

This table compares Ryohin Keikaku and Groupon”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ryohin Keikaku	$5.28 billion	2.90	$340.67 million	$0.37	36.89
Groupon	$498.42 million	1.60	-$83.52 million	($3.11)	-6.30

Ryohin Keikaku has higher revenue and earnings than Groupon. Groupon is trading at a lower price-to-earnings ratio than Ryohin Keikaku, indicating that it is currently the more affordable of the two stocks.

Summary

Ryohin Keikaku beats Groupon on 8 of the 12 factors compared between the two stocks.

About Ryohin Keikaku

Ryohin Keikaku Co., Ltd. develops, manufactures, distributes, and sells apparel, household goods, and food items in Japan and internationally. It offers apparel products, comprising shirts, denim jeans, socks, sneakers, innerwear, sweaters, camisoles, cardigans, windbreakers, duffle coats, skirts, trousers, pajamas for adults and kids, maternity stoles, backpacks, handbags, case trolleys, hats, mufflers, gloves, stockings, umbrellas, slippers, sandals, and Japanese working clothes; household goods products, including towels, mattresses, toning water, skin care products, make-up tools, fragrance oils, aroma diffusers, air purifiers, stationary, storage boxes and cases, kitchenware, cutleries, refrigerators, toasters, kettles, juicers, mixers, coffee makers, rice cookers, cabinets, shelves, chairs, benches, sofas, beds, duvets, blankets, refillable bottles, baskets, buckets, cleaning tools, laundry supplies, emergency kits, reusable masks, clocks, flashlights, radios, speakers, extension cords, travel adapters, toys, and bicycles and tricycles; and food products, including retort pouch foods, baumkuchen banana, frying-pan-ready meal kits, butter chicken curry, cookies, crackers, canned foods, potato chips, seasonings, jams, soups, frozen foods, doughnuts, ice cream, coffee beans, sake, sparkling water, and apple juice, as well as houses. The company designs, manufactures, and sells home furnishings, such as furniture, accessories, antiques, curtains, and rugs; engages in the production, consulting, and design of residential and commercial spaces; and develops and manages green/environmental businesses. In addition, it operates MUJI to GO shops that offer travel, commuting, business, study, and play products; Found MUJI; MUJI 500; Café&Meal; IDÉE stores; MUJI Campsite, which operates campgrounds; MUJI HOUSE; and muji.com, an online store. Ryohin Keikaku Co., Ltd. was incorporated in 1979 and is based in Tokyo, Japan.

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.