Financial Survey: Alibaba Group Holding Limited (BABA) and E Commerce China Dangdang (NYSE:DANG)

E Commerce China Dangdang (NYSE: DANG) and Alibaba Group Holding Limited (NYSE:BABA) are both technology companies, but which is the superior business? We will compare the two companies based on the strength of their institutional ownership, earnings, profitability, analyst recommendations, dividends, valuation and risk.

Analyst Recommendations

This is a summary of recent ratings for E Commerce China Dangdang and Alibaba Group Holding Limited, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
E Commerce China Dangdang 0 0 0 0 N/A
Alibaba Group Holding Limited 1 1 30 1 2.94

Alibaba Group Holding Limited has a consensus target price of $167.24, indicating a potential downside of 1.04%. Given Alibaba Group Holding Limited’s higher possible upside, analysts plainly believe Alibaba Group Holding Limited is more favorable than E Commerce China Dangdang.

Institutional & Insider Ownership

25.7% of E Commerce China Dangdang shares are owned by institutional investors. Comparatively, 37.4% of Alibaba Group Holding Limited shares are owned by institutional investors. 12.5% of Alibaba Group Holding Limited shares are owned by company 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.

Profitability

This table compares E Commerce China Dangdang and Alibaba Group Holding Limited’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
E Commerce China Dangdang 8.34% 107.58% 17.19%
Alibaba Group Holding Limited 28.77% 16.85% 10.63%

Risk & Volatility

E Commerce China Dangdang has a beta of 3.34, suggesting that its share price is 234% more volatile than the S&P 500. Comparatively, Alibaba Group Holding Limited has a beta of 2.62, suggesting that its share price is 162% more volatile than the S&P 500.

Earnings & Valuation

This table compares E Commerce China Dangdang and Alibaba Group Holding Limited’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
E Commerce China Dangdang N/A N/A N/A ($0.15) -44.20
Alibaba Group Holding Limited $26.40 billion 16.28 $10.92 billion $2.88 58.68

Alibaba Group Holding Limited has higher revenue and earnings than E Commerce China Dangdang. E Commerce China Dangdang is trading at a lower price-to-earnings ratio than Alibaba Group Holding Limited, indicating that it is currently the more affordable of the two stocks.

Summary

Alibaba Group Holding Limited beats E Commerce China Dangdang on 8 of the 11 factors compared between the two stocks.

E Commerce China Dangdang Company Profile

E-Commerce China Dangdang Inc. is a business to consumer e-commerce company. The Company is focused on selling books online. The Company operates and manages its business in the segment of the provision of a single class of global services for the delivery of content and applications over the Internet. It offers over 1,200,000 book titles, including approximately 1,100,000 Chinese language titles. It offers other media products and general merchandise categories on its Internet platform, including fashion and apparel beauty and personal care products, home and lifestyle products, and baby, children and maternity products. It also offers the dangdang.com marketplace program, which allows third-party merchants to sell their general merchandise products alongside its products. Its Internet platform consists of its dangdang.com Website and its Dangdang mobile shopping application. Its Dangdang Reader application allows customers to browse for, download, purchase and read e-books.

Alibaba Group Holding Limited Company Profile

Alibaba Group Holding Limited is a holding company. Through its subsidiaries, the Company is engaged in online and mobile commerce through offering of products, services and technology that enable merchants, brands and other businesses to transform the way they market, sell and operate in the People’s Republic of China (China) and internationally. Its businesses consist of core commerce, cloud computing, mobile media and entertainment, and other innovation initiatives. Through investee affiliates, it also participates in the logistics and local services sectors. Retail commerce in China operated by the Company includes the China online commerce destination (Taobao Marketplace); the China third-party platform for brands and retailers (Tmall), and the sales and marketing platform for flash sales (Juhuasuan). Wholesale commerce in China operated by the Company includes the China domestic wholesale marketplace (1688.com) and the wholesale marketplace for global trade (Alibaba.com).

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