MercadoLibre (NASDAQ:MELI) vs. Alibaba Group (NYSE:BABA) Head-To-Head Comparison

Alibaba Group (NYSE:BABA) and MercadoLibre (NASDAQ:MELI) are both large-cap consumer discretionary companies, but which is the superior stock? We will compare the two companies based on the strength of their analyst recommendations, profitability, risk, valuation, institutional ownership, dividends and earnings.

Institutional & Insider Ownership

13.5% of Alibaba Group shares are owned by institutional investors. Comparatively, 87.6% of MercadoLibre shares are owned by institutional investors. 12.5% of Alibaba Group shares are owned by insiders. Comparatively, 0.3% of MercadoLibre shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Alibaba Group 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
Alibaba Group	$148.40 billion	1.58	$15.02 billion	$4.13	22.87
MercadoLibre	$28.89 billion	2.59	$2.00 billion	$37.28	39.57

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Alibaba Group	7.00%	4.79%	2.80%
MercadoLibre	4.91%	25.15%	3.81%

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Alibaba Group and MercadoLibre, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Alibaba Group	0	5	14	2	2.86
MercadoLibre	0	5	13	1	2.79

Alibaba Group presently has a consensus target price of $183.53, indicating a potential upside of 94.26%. MercadoLibre has a consensus target price of $2,170.62, indicating a potential upside of 47.15%. Given Alibaba Group’s stronger consensus rating and higher probable upside, analysts plainly believe Alibaba Group is more favorable than MercadoLibre.

Volatility & Risk

Alibaba Group has a beta of 0.44, meaning that its share price is 56% less volatile than the S&P 500. Comparatively, MercadoLibre has a beta of 1.42, meaning that its share price is 42% more volatile than the S&P 500.

Summary

Alibaba Group beats MercadoLibre on 8 of the 15 factors compared between the two stocks.

About Alibaba Group

Alibaba Group Holding Limited is a technology and commerce company founded in 1999 and headquartered in Hangzhou, China. It operates digital platforms that connect consumers, merchants, businesses and other participants in commerce. Its businesses include China-focused marketplaces such as Taobao and Tmall, international platforms including AliExpress and Alibaba.com, and Alibaba Cloud, which provides cloud computing and related technology services. The group also has operations in areas such as logistics, local services and digital media.

About MercadoLibre

MercadoLibre, Inc. operates an online commerce and financial technology platform focused on Latin America. Founded in Argentina in 1999, the company connects buyers and sellers through its marketplace, where businesses and individuals can list and purchase a wide range of products. The company’s services also include Mercado Pago, which offers digital payment and financial services for transactions on and off its marketplace. MercadoLibre supports commerce with services such as Mercado Envíos, its shipping and logistics platform, and provides advertising tools for merchants and brands.