Comparing Fiverr International (NYSE:FVRR) and Groupon (NASDAQ:GRPN)

Groupon (NASDAQ:GRPN) and Fiverr International (NYSE:FVRR) are both small-cap retail/wholesale companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, earnings, valuation, institutional ownership, risk, profitability and analyst recommendations.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Groupon	-20.78%	-717.37%	-16.40%
Fiverr International	6.70%	17.22%	7.71%

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Groupon and Fiverr International, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Groupon	2	1	3	0	2.17
Fiverr International	2	7	3	0	2.08

Groupon presently has a consensus price target of $28.67, suggesting a potential upside of 68.53%. Fiverr International has a consensus price target of $19.30, suggesting a potential upside of 93.37%. Given Fiverr International’s higher possible upside, analysts clearly believe Fiverr International is more favorable than Groupon.

Institutional & Insider Ownership

90.1% of Groupon shares are held by institutional investors. Comparatively, 59.0% of Fiverr International shares are held by institutional investors. 36.6% of Groupon shares are held by company insiders. Comparatively, 15.9% of Fiverr International shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Volatility & Risk

Groupon has a beta of 0.25, meaning that its stock price is 75% less volatile than the S&P 500. Comparatively, Fiverr International has a beta of 1.41, meaning that its stock price is 41% more volatile than the S&P 500.

Valuation & Earnings

This table compares Groupon and Fiverr International”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	1.30	-$83.52 million	($2.61)	-6.52
Fiverr International	$429.22 million	0.84	$20.98 million	$0.78	12.80

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

Summary

Fiverr International beats Groupon on 8 of the 13 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 Fiverr International

Fiverr International Ltd. operates an online marketplace worldwide. Its platform enables sellers to sell their services and buyers to buy them. The company's platform includes various categories in ten verticals, including graphic and design, digital marketing, writing and translation, video and animation, music and audio, programming and tech, business, data, lifestyle, and photography. It also offers value-added products, including subscription-based content marketing, back-office, learning and development offerings, creative talent, and freelancer management platforms. In addition, the company provides a suite of professional solutions that enable businesses to engage with freelancers; Fiverr Pro, a marketplace; Fiverr Certified, a storefront to access certified experts for partner vendors; Fiverr Enterprise, a gateway to source and manage on-demand and long-term freelancers. Further, it offers various value-added products, including Promoted Gigs which allows sellers to advertise their services on the platform; and Seller Plus, a subscription program that equips sellers with advanced tools. The company's buyers include businesses of various sizes, as well as sellers comprise a group of freelancers and agencies. Fiverr International Ltd. was incorporated in 2010 and is headquartered in Tel Aviv, Israel.