Groupon (NASDAQ:GRPN) versus Macy’s (NYSE:M) Critical Review

Groupon (NASDAQ:GRPN) and Macy’s (NYSE:M) are both consumer discretionary companies, but which is the superior business? We will compare the two companies based on the strength of their risk, profitability, dividends, institutional ownership, valuation, earnings and analyst recommendations.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Groupon	-1.67%	N/A	-1.36%
Macy’s	3.29%	13.21%	3.83%

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Groupon	$498.42 million	0.98	-$83.52 million	($0.22)	-55.50
Macy’s	$22.62 billion	0.28	$642.00 million	$2.73	8.91

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

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Groupon	2	0	1	0	1.67
Macy’s	2	8	3	0	2.08

Groupon presently has a consensus target price of $23.00, indicating a potential upside of 88.37%. Macy’s has a consensus target price of $22.78, indicating a potential downside of 6.33%. Given Groupon’s higher possible upside, equities analysts clearly believe Groupon is more favorable than Macy’s.

Volatility and Risk

Groupon has a beta of 0.29, indicating that its stock price is 71% less volatile than the S&P 500. Comparatively, Macy’s has a beta of 1.39, indicating that its stock price is 39% more volatile than the S&P 500.

Insider & Institutional Ownership

90.0% of Groupon shares are held by institutional investors. Comparatively, 87.4% of Macy’s shares are held by institutional investors. 36.6% of Groupon shares are held by company insiders. Comparatively, 1.1% of Macy’s shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

Macy’s beats Groupon on 10 of the 14 factors compared between the two stocks.

About Groupon

Groupon, Inc. operates an online marketplace that connects consumers with local businesses. Through its website and mobile app, customers can discover and purchase offers on services and experiences such as dining, wellness, entertainment and activities. The company also provides merchants with a platform to promote their offerings and reach potential customers. Groupon has operated in North America and international markets, though the availability of its services and offers varies by location.

About Macy’s

Macy’s, Inc. is a U.S. retailer operating department stores and digital shopping platforms under the Macy’s, Bloomingdale’s and Bluemercury brands. Its offerings include apparel, footwear, accessories, beauty products, jewelry, home furnishings and other consumer goods. The company traces its history to 1858, when Rowland Hussey Macy opened a dry-goods store in New York City. Macy’s, Inc. serves customers primarily in the United States through its stores and e-commerce businesses. Tony Spring, who previously led Bloomingdale’s, became Macy’s, Inc.’s chief executive officer in 2024.