Critical Contrast: BSQUARE (BSQR) & Alibaba Group (BABA)

Alibaba Group (NYSE:BABA) and BSQUARE (NASDAQ:BSQR) are both retail/wholesale companies, but which is the superior stock? We will compare the two businesses based on the strength of their profitability, risk, institutional ownership, valuation, earnings, analyst recommendations and dividends.

Insider and Institutional Ownership

38.6% of Alibaba Group shares are held by institutional investors. Comparatively, 24.5% of BSQUARE shares are held by institutional investors. 12.5% of Alibaba Group shares are held by insiders. Comparatively, 11.0% of BSQUARE shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

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

Net Margins Return on Equity Return on Assets
Alibaba Group 19.33% 12.99% 7.80%
BSQUARE -16.35% -45.12% -28.72%

Earnings and Valuation

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Alibaba Group $39.90 billion 9.71 $10.22 billion $4.03 37.55
BSQUARE $80.81 million 0.30 -$9.05 million N/A N/A

Alibaba Group has higher revenue and earnings than BSQUARE.

Volatility and Risk

Alibaba Group has a beta of 2.24, suggesting that its stock price is 124% more volatile than the S&P 500. Comparatively, BSQUARE has a beta of 1.63, suggesting that its stock price is 63% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and price targets for Alibaba Group and BSQUARE, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Alibaba Group 0 0 25 1 3.04
BSQUARE 0 0 0 0 N/A

Alibaba Group presently has a consensus price target of $214.75, indicating a potential upside of 41.92%. Given Alibaba Group’s higher possible upside, analysts plainly believe Alibaba Group is more favorable than BSQUARE.

Summary

Alibaba Group beats BSQUARE on 12 of the 12 factors compared between the two stocks.

About Alibaba Group

Alibaba Group Holding Limited, through its subsidiaries, operates as an online and mobile commerce company in the People's Republic of China and internationally. The company operates in four segments: Core Commerce, Cloud Computing, Digital Media and Entertainment, and Innovation Initiatives and Others. It operates Taobao Marketplace, a mobile commerce destination; Tmall, a third-party platform for brands and retailers; Rural Taobao program that enables rural residents and businesses to sell agricultural products to urban consumers; 1688.com, an online wholesale marketplace; Alibaba.com, an online wholesale marketplace; AliExpress, a retail marketplace; Lazada, an e-commerce platform; and Lingshoutong, a digital sourcing platform. The company also provides pay-for-performance and display marketing services; and Taobao Ad Network and Exchange, a real-time bidding online marketing exchange in China; and digital payment and financial technology platform services. In addition, it offers cloud computing services, including elastic computing, database, storage, virtualization network, large scale computing, security, and management and application services, big data analytics, a machine learning platform, and Internet of Things and other service for enterprises; and payment and escrow services; and movies, TV drama series, online dramas, variety shows, news feeds, games, literature and music, and other areas through various content platforms, as well as develops and operates mobile browsers. Further, the company provides AutoNavi, a mobile digital map, navigation, and real-time traffic information; DingTalk, a proprietary enterprise communication and collaboration platform; and Tmall Genie, an AI-powered voice assistant, which helps consumers to shop, order local services, search for information, control smart appliances, and play interactive content. The company was founded in 1999 and is based in Hangzhou, the People's Republic of China.

About BSQUARE

BSQUARE Corporation provides software solutions and related engineering services to businesses that develop, market, and sell standalone intelligent systems in North America, Europe, and Asia. Its software products include HTML5 rendering engine that is based on the open-source WebKit platform and facilitates device makers to create applications and user interfaces for their devices; and TestQuest 10, a software testing automation tool. The company also offers DataV software services, such as integration with enterprise databases; integration with internal enterprise systems; integration with external public or third-party data sources; custom application development; software integration on remote devices; training; and management of customer cloud deployments hosting DataV software. In addition, it provides engineering services, such as architectural and system design; software design and development; platform development systems integration; application, middleware, and multimedia software development; quality assurance and testing; device solution strategy consulting; technical support; implementation; and test automation engineering and consulting services. The company markets and sells its products to original equipment manufacturers, original design manufacturers, and corporate enterprises, as well as silicon and peripheral vendors. BSQUARE Corporation was founded in 1994 and is headquartered in Bellevue, Washington.

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