Reviewing Alibaba Group (NYSE:BABA) and PDD (NASDAQ:PDD)

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

Volatility and Risk

Alibaba Group has a beta of 0.47, indicating that its share price is 53% less volatile than the S&P 500. Comparatively, PDD has a beta of -0.05, indicating that its share price is 105% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Alibaba Group and PDD, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Alibaba Group	0	6	13	2	2.81
PDD	1	9	6	0	2.31

Alibaba Group currently has a consensus price target of $182.89, indicating a potential upside of 80.07%. PDD has a consensus price target of $110.31, indicating a potential upside of 35.05%. Given Alibaba Group’s stronger consensus rating and higher possible upside, analysts plainly believe Alibaba Group is more favorable than PDD.

Earnings & Valuation

This table compares Alibaba Group and PDD”s gross 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	1.70	$15.02 billion	$4.13	24.59
PDD	$61.75 billion	1.88	$13.99 billion	$9.08	9.00

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

Profitability

This table compares Alibaba Group and PDD’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%
PDD	20.73%	22.29%	14.68%

Insider and Institutional Ownership

13.5% of Alibaba Group shares are owned by institutional investors. Comparatively, 39.8% of PDD shares are owned by institutional investors. 12.5% of Alibaba Group shares are owned by insiders. Comparatively, 3.7% of PDD shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

Alibaba Group beats PDD on 9 of the 15 factors compared between the two stocks.

About Alibaba Group

Alibaba Group Holding Limited, through its subsidiaries, provides technology infrastructure and marketing reach to help merchants, brands, retailers, and other businesses to engage with their users and customers in the People's Republic of China and internationally. The company operates through seven segments: China Commerce, International Commerce, Local Consumer Services, Cainiao, Cloud, Digital Media and Entertainment, and Innovation Initiatives and Others. It operates Taobao, a digital retail platform; Tmall, a third-party online and mobile commerce platform; Alimama, a monetization platform; 1688.com and Alibaba.com, which are online wholesale marketplaces; AliExpress, a retail marketplace; Lazada, Trendyol, and Daraz that are e-commerce platforms; Freshippo, a retail platform for groceries and fresh goods; and Tmall Global, an import e-commerce platform. The company also operates Cainiao Network logistic services platform; Ele.me, an on-demand delivery and local services platform; Koubei, a restaurant and local services guide platform; and Fliggy, an online travel platform. In addition, it offers pay-for-performance, in-feed, and display marketing services; and Taobao Ad Network and Exchange, a real-time online bidding marketing exchange. Further, the company provides elastic computing, storage, network, security, database, big data, and IoT services; and hardware, software license, software installation, and application development and maintenance services. Additionally, it operates Youku, an online video platform; Quark, a platform for information search, storage, and consumption; Alibaba Pictures and other content platforms that provide online videos, films, live events, news feeds, literature, music, and others; Amap, a mobile digital map, navigation, and real-time traffic information app; DingTalk, a business efficiency mobile app; and Tmall Genie smart speaker. The company was incorporated in 1999 and is based in Hangzhou, the People's Republic of China.

About PDD

PDD Holdings Inc., a multinational commerce group, owns and operates a portfolio of businesses. It operates Pinduoduo, an e-commerce platform that offers products in various categories, including agricultural produce, apparel, shoes, bags, mother and childcare products, food and beverage, electronic appliances, furniture and household goods, cosmetics and other personal care, sports and fitness items and auto accessories; and Temu, an online marketplace. It focuses on bringing businesses and people into the digital economy. The company was formerly known as Pinduoduo Inc. and changed its name to PDD Holdings Inc. in February 2023. The company was incorporated in 2015 and is based in Dublin, Ireland.