Groupon (NASDAQ:GRPN – Get Free Report) and Etsy (NASDAQ:ETSY – Get Free Report) are both retail/wholesale companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, analyst recommendations, earnings, valuation, profitability, dividends and institutional ownership.
Institutional and Insider Ownership
90.1% of Groupon shares are owned by institutional investors. Comparatively, 99.5% of Etsy shares are owned by institutional investors. 35.7% of Groupon shares are owned by insiders. Comparatively, 2.8% of Etsy shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Valuation & Earnings
This table compares Groupon and Etsy”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Groupon | $492.56 million | 1.01 | -$59.03 million | ($3.49) | -3.48 |
| Etsy | $2.85 billion | 1.81 | $303.28 million | $1.31 | 39.90 |
Etsy has higher revenue and earnings than Groupon. Groupon is trading at a lower price-to-earnings ratio than Etsy, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a breakdown of recent recommendations for Groupon and Etsy, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Groupon | 2 | 1 | 3 | 0 | 2.17 |
| Etsy | 3 | 18 | 8 | 1 | 2.23 |
Groupon currently has a consensus price target of $31.25, suggesting a potential upside of 156.99%. Etsy has a consensus price target of $61.12, suggesting a potential upside of 16.93%. Given Groupon’s higher possible upside, equities analysts clearly believe Groupon is more favorable than Etsy.
Profitability
This table compares Groupon and Etsy’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Groupon | -28.52% | -717.37% | -22.78% |
| Etsy | 5.78% | -31.10% | 11.14% |
Volatility and Risk
Groupon has a beta of -0.01, indicating that its share price is 101% less volatile than the S&P 500. Comparatively, Etsy has a beta of 1.77, indicating that its share price is 77% more volatile than the S&P 500.
Summary
Etsy beats Groupon on 13 of the 15 factors compared between the two stocks.
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.
About Etsy
Etsy, Inc., together with its subsidiaries, operates two-sided online marketplaces that connect buyers and sellers in the United States, the United Kingdom, Germany, Canada, Australia, and France. Its primary marketplace is Etsy.com that connects artisans and entrepreneurs with various consumers. The company also offers Reverb, a musical instrument marketplace; Depop, a fashion resale marketplace; and Elo7, a Brazil-based marketplace for handmade and unique items. In addition, it offers various seller services, including Etsy Payments, a payment processing service; Etsy Ads, an advertising platform; and Shipping Labels, which allows sellers in the United States, Canada, the United Kingdom, Australia, and India to purchase discounted shipping labels. Further, the company provides the Etsy Purchase Protection program that is designed to help buyers; the Etsy Share and Save program for sellers to save on Etsy fees for sales that drive to their Etsy shop from their own channels. Additionally, it offers educational resources comprising blog posts, video tutorials, Etsy Seller Handbook, Etsy.com online forums, and insights; Etsy Teams, a platform to build personal relationships with other Etsy sellers; and a Star Seller program. The company was formerly known as Indieco, Inc changed its name to Etsy, Inc. in June 2006. Etsy, Inc. was founded in 2005 and is headquartered in Brooklyn, New York.
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