Groupon (NASDAQ:GRPN) vs. Starco Brands (NASDAQ:STCB) Critical Analysis

Groupon (NASDAQ:GRPN) and Starco Brands (OTCMKTS:STCB) are both small-cap retail/wholesale companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, risk, valuation, profitability, dividends and earnings.

Profitability

This table compares Groupon and Starco Brands’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Groupon -2.21% 9.21% 2.06%
Starco Brands -45.34% N/A -114.39%

Risk & Volatility

Groupon has a beta of 1.34, suggesting that its stock price is 34% more volatile than the S&P 500. Comparatively, Starco Brands has a beta of 1.39, suggesting that its stock price is 39% more volatile than the S&P 500.

Institutional & Insider Ownership

67.1% of Groupon shares are owned by institutional investors. 15.5% of Groupon shares are owned by company insiders. Comparatively, 63.0% of Starco Brands shares are owned 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.

Earnings and Valuation

This table compares Groupon and Starco Brands’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Groupon $2.64 billion 0.63 -$11.07 million $0.09 32.56
Starco Brands $130,000.00 3,671.31 -$440,000.00 N/A N/A

Starco Brands has lower revenue, but higher earnings than Groupon.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Groupon and Starco Brands, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Groupon 1 2 1 0 2.00
Starco Brands 0 0 0 0 N/A

Groupon presently has a consensus price target of $3.75, indicating a potential upside of 27.99%. Given Groupon’s higher possible upside, research analysts clearly believe Groupon is more favorable than Starco Brands.

Summary

Groupon beats Starco Brands on 7 of the 11 factors compared between the two stocks.

About Groupon

Groupon, Inc. operates online local commerce marketplaces that connect merchants to consumers by offering goods and services at a discount in North America and internationally. The company provides deals in various categories, including events and activities, beauty and spa, health and fitness, food and drink, home and garden, and automotive; and deals on various product lines, such as electronics, sporting goods, jewelry, toys, household items, and apparel, as well as discounted and market rates for hotel, airfare, and package deals. It offers its deal offerings to customers through Websites; search engines; mobile applications and mobile Web browsers, which enable consumers to browse, purchase, manage, and redeem deals on mobile devices; emails and push notifications; affiliate channels; social and display advertising; and offline marketing. The company was formerly known as ThePoint.com, Inc. and changed its name to Groupon, Inc. in October 2008. The company was founded in 2008 and is headquartered in Chicago, Illinois.

About Starco Brands

Starco Brands, Inc. develops and markets a range of consumer packaged products in the United States. It provides products in various categories, including household cleaning, personal care, food, beverage and spirits, DIY hardware, and arts and crafts. The company sells its products through various retailers, as well as through online retailers. The company was formerly known as Insynergy Products, Inc. and changed its name to Starco Brands, Inc. in September 2017. Starco Brands, Inc. was founded in 2010 and is based in Santa Monica, California.

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