Critical Contrast: Baozun (NASDAQ:BZUN) versus Grid Dynamics (NASDAQ:GDYN)

Grid Dynamics (NASDAQ:GDYN) and Baozun (NASDAQ:BZUN) are both small-cap computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, institutional ownership, analyst recommendations, risk, valuation, earnings and dividends.

Profitability

This table compares Grid Dynamics and Baozun’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Grid Dynamics	4.37%	1.89%	1.64%
Baozun	-1.93%	-4.60%	-1.89%

Valuation and Earnings

This table compares Grid Dynamics and Baozun”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Grid Dynamics	$350.57 million	1.93	$4.04 million	$0.19	42.11
Baozun	$1.29 billion	0.18	-$18.68 million	($0.44)	-9.27

Grid Dynamics has higher earnings, but lower revenue than Baozun. Baozun is trading at a lower price-to-earnings ratio than Grid Dynamics, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Grid Dynamics and Baozun, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Grid Dynamics	0	0	5	0	3.00
Baozun	0	0	1	0	3.00

Grid Dynamics presently has a consensus target price of $14.80, indicating a potential upside of 85.00%. Baozun has a consensus target price of $4.20, indicating a potential upside of 2.94%. Given Grid Dynamics’ higher probable upside, analysts clearly believe Grid Dynamics is more favorable than Baozun.

Volatility & Risk

Grid Dynamics has a beta of 1.03, suggesting that its stock price is 3% more volatile than the S&P 500. Comparatively, Baozun has a beta of 0.3, suggesting that its stock price is 70% less volatile than the S&P 500.

Insider & Institutional Ownership

71.2% of Grid Dynamics shares are owned by institutional investors. Comparatively, 47.3% of Baozun shares are owned by institutional investors. 7.2% of Grid Dynamics shares are owned by insiders. Comparatively, 59.2% of Baozun shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

Grid Dynamics beats Baozun on 11 of the 13 factors compared between the two stocks.

About Grid Dynamics

Grid Dynamics Holdings, Inc., together with its subsidiaries, provides technology consulting, platform and product engineering, and analytics services in North America, Europe, and internationally. It offers cloud platform and product engineering services, such as architecting, designing, and building scalable and secure cloud-based platforms and business applications; and AI/machine learning and data platform engineering services that build platforms to facilitate batch and streaming data ingestion, quality governance, orchestration, semantic modeling, observability, and analysis at scale. The company provides digital engagement services, including digital ecosystem design and implementation; and supply chain, Internet of Thing, and advanced manufacturing, which focuses on transforming traditional operations into smart and connected ecosystems. It serves customers that operate in the tech, media, telecommunications, retail, consumer packaged goods, manufacturing, and finance industries. The company was formerly known as ChaSerg Technology Acquisition Corp. and changed its name to Grid Dynamics Holdings, Inc. Grid Dynamics Holdings, Inc. was founded in 2006 and is headquartered in San Ramon, California.

About Baozun

Baozun Inc., through its subsidiaries, provides end-to-end e-commerce solutions to brand partners in the People’s Republic of China. The company operates through two segments, E-Commerce and Brand Management (BBM). The E-Commerce segment offers brands’ store operations, customer services and value-added services in logistics and supply chain management, IT, and digital marketing. The Brand Management segment provides brand management, strategic and tactic positioning, branding and marketing, retail and e-commerce operations, supply chain, and logistics and technology services. It serves brand partners in various categories, including apparel and accessories, appliances, electronics, home and furnishings, food and health products, beauty and cosmetics, fast moving consumer goods, mother and baby products, and automobiles. The company was formerly known as Baozun Cayman Inc. and changed its name to Baozun Inc. in March 2015. Baozun Inc. was founded in 2007 and is headquartered in Shanghai, the People’s Republic of China.