Critical Review: Borderfree (BRDR) versus Alibaba Group Holding Limited (BABA)

Borderfree (NASDAQ: BRDR) and Alibaba Group Holding Limited (NYSE:BABA) are both e-commerce & auction services companies, but which is the superior business? We will compare the two companies based on the strength of their risk, profitability, dividends, institutional ownership, valuation, earnings and analyst recommendations.

Profitability

This table compares Borderfree and Alibaba Group Holding Limited’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Borderfree -18.56% -16.07% -12.01%
Alibaba Group Holding Limited 30.87% 17.89% 11.29%

Earnings & Valuation

This table compares Borderfree and Alibaba Group Holding Limited’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Borderfree N/A N/A N/A ($0.18) -77.78
Alibaba Group Holding Limited $22.99 billion 20.92 $6.35 billion $3.45 54.45

Alibaba Group Holding Limited has higher revenue and earnings than Borderfree. Borderfree 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.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Borderfree and Alibaba Group Holding Limited, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Borderfree 0 0 0 0 N/A
Alibaba Group Holding Limited 1 1 29 1 2.94

Alibaba Group Holding Limited has a consensus target price of $182.44, indicating a potential downside of 2.88%. Given Alibaba Group Holding Limited’s higher possible upside, analysts clearly believe Alibaba Group Holding Limited is more favorable than Borderfree.

Insider & Institutional Ownership

37.5% of Alibaba Group Holding Limited shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

Alibaba Group Holding Limited beats Borderfree on 9 of the 9 factors compared between the two stocks.

About Borderfree

Borderfree, Inc. (Borderfree) is engaged in the e-commerce, operating a technology and services platform to enable the United States retailers to transact with international shoppers. The retailers and brands, which the Company refers to as their customers, that integrate the Company’s solution use the Borderfree platform to develop an e-commerce business across Web, mobile and in-store channels. Borderfree manages all aspects of the international shopping experience, including site localization, multi-currency pricing, payment processing, fraud management, landed cost calculation, customs clearance and brokerage, and global logistics services. The Borderfree platform consists of technology, data, know-how and services that span: consumer experience localization; payments, compliance and risk management; global transportation and logistics; post-delivery customer care, and global consumer insights and marketing.

About Alibaba Group Holding Limited

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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