Groupon (NASDAQ:GRPN – Get Free Report) and Bed Bath & Beyond (NYSE:BBBY – Get Free Report) are both small-cap retail/wholesale companies, but which is the better investment? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, earnings, profitability, dividends, risk and institutional ownership.
Risk & Volatility
Groupon has a beta of 0.25, indicating that its share price is 75% less volatile than the S&P 500. Comparatively, Bed Bath & Beyond has a beta of 2.86, indicating that its share price is 186% more volatile than the S&P 500.
Profitability
This table compares Groupon and Bed Bath & Beyond’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% |
| Bed Bath & Beyond | -5.76% | -27.60% | -12.99% |
Analyst Ratings
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Groupon | 2 | 1 | 2 | 0 | 2.00 |
| Bed Bath & Beyond | 1 | 3 | 1 | 0 | 2.00 |
Groupon currently has a consensus price target of $19.50, suggesting a potential upside of 6.44%. Bed Bath & Beyond has a consensus price target of $8.67, suggesting a potential upside of 28.36%. Given Bed Bath & Beyond’s higher probable upside, analysts plainly believe Bed Bath & Beyond is more favorable than Groupon.
Institutional and Insider Ownership
90.1% of Groupon shares are owned by institutional investors. Comparatively, 76.3% of Bed Bath & Beyond shares are owned by institutional investors. 36.6% of Groupon shares are owned by insiders. Comparatively, 1.8% of Bed Bath & Beyond shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Earnings and Valuation
This table compares Groupon and Bed Bath & Beyond”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Groupon | $498.42 million | 1.40 | -$83.52 million | ($2.61) | -7.02 |
| Bed Bath & Beyond | $1.04 billion | 0.48 | -$84.62 million | ($0.95) | -7.11 |
Groupon has higher earnings, but lower revenue than Bed Bath & Beyond. Bed Bath & Beyond is trading at a lower price-to-earnings ratio than Groupon, indicating that it is currently the more affordable of the two stocks.
Summary
Bed Bath & Beyond beats Groupon on 7 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 Bed Bath & Beyond
Beyond, Inc. operates as an online retailer of furniture and home furnishings products in the United States and Canada. The company offers furniture, bedding and bath, patio and outdoor gear, area rugs, tabletop and cookware, décor, storage and organization, small appliances, home improvement, and other products under the Bed Bath & Beyond brand. The company provides its products and services through its e-commerce platform accessible through its mobile application, which includes bedbathandbeyond.com, bedbathandbeyond.ca, and overstockgovernment.com. It also offers businesses advertising products or services on its website; Marketplace, a service that allows its partners to sell their products through third party sites; product sales to international customers using third party logistics providers; and Supplier Oasis, a singular integration point that enables partners to manage their products, inventory, and sales channels, as well as access multi-channel fulfillment services through its distribution network. The company was formerly known as Overstock.com, Inc. and changed its name to Beyond, Inc. in November 2023. Beyond, Inc. was founded in 1997 and is headquartered in Midvale, Utah.
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