Critical Survey: Groupon (GRPN) & AirMedia Group (AMCN)

Groupon (NASDAQ:GRPN) and AirMedia Group (NASDAQ:AMCN) are both small-cap retail/wholesale companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, risk, profitability, earnings, institutional ownership and dividends.

Volatility and Risk

Groupon has a beta of 1.75, suggesting that its share price is 75% more volatile than the S&P 500. Comparatively, AirMedia Group has a beta of 0.98, suggesting that its share price is 2% less volatile than the S&P 500.

Insider & Institutional Ownership

66.2% of Groupon shares are owned by institutional investors. Comparatively, 0.9% of AirMedia Group shares are owned by institutional investors. 16.9% of Groupon shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and price targets for Groupon and AirMedia Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Groupon 1 5 3 0 2.22
AirMedia Group 0 0 0 0 N/A

Groupon currently has a consensus price target of $5.12, indicating a potential upside of 72.89%. Given Groupon’s higher probable upside, research analysts clearly believe Groupon is more favorable than AirMedia Group.

Profitability

This table compares Groupon and AirMedia Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Groupon -1.97% -27.12% -4.72%
AirMedia Group N/A N/A N/A

Earnings & Valuation

This table compares Groupon and AirMedia Group’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Groupon $2.84 billion 0.59 $14.04 million ($0.03) -98.67
AirMedia Group $23.75 million 0.93 -$156.47 million N/A N/A

Groupon has higher revenue and earnings than AirMedia Group.

Summary

Groupon beats AirMedia Group on 7 of the 11 factors compared between the two stocks.

About Groupon

Groupon, Inc. operates online local commerce marketplaces that connect merchants to consumers by offering goods and services at a discount in North America and internationally. The company provides deals in various categories, including events and activities, beauty and spa, health and fitness, food and drink, home and garden, and automotive; and deals on various product lines, such as electronics, sporting goods, jewelries, toys, household items, and apparel, as well as provides discounted and market rates for hotel, airfare, and package deals. It offers its deal offerings to customers through Websites; search engines; mobile applications and mobile Web browsers, which enable consumers to browse, purchase, manage, and redeem deals on mobile devices; emails; affiliate channels; display advertising; and television and radio advertising. The company was formerly known as ThePoint.com, Inc. and changed its name to Groupon, Inc. in October 2008. The company was founded in 2008 and is headquartered in Chicago, Illinois. Groupon, Inc. is a subsidiary of The Point, LLC.

About AirMedia Group

AirMedia Group Inc. operates out-of-home advertising platforms in the People's Republic of China. The company operates a network of digital (television) TV screens on planes operated by 7 airlines; and gas station media network, as well as other outdoor media advertising platforms in gas stations. It also displays non-advertising content, such as weather, sports, comedy clips, local attractions, documentaries, commentaries, and reality shows. In addition, the company holds concession rights to install and operate Wi-Fi systems on railway administration bureaus, long-haul buses, and airlines; and operates advertising platforms, such as light boxes, billboards, and LED screens. Further, it operates CIBN-AirMedia channel to broadcast network TV programs to air travelers. AirMedia Group Inc. was founded in 2005 and is headquartered in Beijing, the People's Republic of China.

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