Groupon (NASDAQ:GRPN – Get Free Report) and MercadoLibre (NASDAQ:MELI – Get Free Report) are both retail/wholesale companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, analyst recommendations, profitability, institutional ownership, earnings, valuation and dividends.
Insider and Institutional Ownership
90.1% of Groupon shares are owned by institutional investors. Comparatively, 87.6% of MercadoLibre shares are owned by institutional investors. 35.7% of Groupon shares are owned by insiders. Comparatively, 0.3% of MercadoLibre 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.
Valuation & Earnings
This table compares Groupon and MercadoLibre”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Groupon | $492.56 million | 1.34 | -$59.03 million | ($3.49) | -4.62 |
| MercadoLibre | $20.78 billion | 5.40 | $1.91 billion | $40.98 | 53.99 |
MercadoLibre has higher revenue and earnings than Groupon. Groupon is trading at a lower price-to-earnings ratio than MercadoLibre, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a summary of current ratings and recommmendations for Groupon and MercadoLibre, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Groupon | 2 | 1 | 3 | 0 | 2.17 |
| MercadoLibre | 1 | 3 | 15 | 1 | 2.80 |
Groupon presently has a consensus target price of $31.25, suggesting a potential upside of 93.62%. MercadoLibre has a consensus target price of $2,842.94, suggesting a potential upside of 28.49%. Given Groupon’s higher possible upside, equities research analysts clearly believe Groupon is more favorable than MercadoLibre.
Profitability
This table compares Groupon and MercadoLibre’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Groupon | -28.52% | -717.37% | -22.78% |
| MercadoLibre | 7.93% | 39.03% | 6.78% |
Risk and Volatility
Groupon has a beta of 0.02, suggesting that its stock price is 98% less volatile than the S&P 500. Comparatively, MercadoLibre has a beta of 1.42, suggesting that its stock price is 42% more volatile than the S&P 500.
Summary
MercadoLibre beats Groupon on 12 of the 15 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 MercadoLibre
MercadoLibre, Inc. operates online commerce platforms in the United States. It operates Mercado Libre Marketplace, an automated online commerce platform that enables businesses, merchants, and individuals to list merchandise and conduct sales and purchases digitally; and Mercado Pago FinTech platform, a financial technology solution platform, which facilitates transactions on and off its marketplaces by providing a mechanism that allows its users to send and receive payments online, as well as allows users to transfer money through their websites or on the apps. The company also offers Mercado Fondo that allows users to invest funds deposited in their Mercado Pago accounts; Mercado Credito, which extends loans to certain merchants and consumers; and Mercado Envios logistics solution that enables sellers on its platform to utilize third-party carriers and other logistics service providers, as well as fulfillment and warehousing services for sellers. In addition, it provides Mercado Libre Classifieds, an online classified listing service, where users can list and purchase motor vehicles, real estate, and services; Mercado Ads, an advertising platform, which enables large retailers and brands to promote their products and services on the web; and Mercado Shops, an online storefronts solution that enables users to set-up, manage, and promote their own digital stores. The company was incorporated in 1999 and is headquartered in Montevideo, Uruguay.
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