Financial Analysis: Payoneer Global (NASDAQ:PAYO) and Alibaba Group (NYSE:BABA)

Alibaba Group (NYSE:BABA) and Payoneer Global (NASDAQ:PAYO) are both retail/wholesale companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, risk, profitability, earnings, dividends, analyst recommendations and valuation.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Alibaba Group	8.98%	12.28%	7.44%
Payoneer Global	13.82%	17.78%	1.73%

Earnings and Valuation

This table compares Alibaba Group and Payoneer Global”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Alibaba Group	$130.35 billion	1.89	$11.08 billion	$4.93	21.04
Payoneer Global	$831.10 million	4.54	$93.33 million	$0.35	30.26

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

Risk & Volatility

Alibaba Group has a beta of 0.31, suggesting that its stock price is 69% less volatile than the S&P 500. Comparatively, Payoneer Global has a beta of 0.93, suggesting that its stock price is 7% less volatile than the S&P 500.

Institutional & Insider Ownership

13.5% of Alibaba Group shares are held by institutional investors. Comparatively, 82.2% of Payoneer Global shares are held by institutional investors. 12.5% of Alibaba Group shares are held by insiders. Comparatively, 5.6% of Payoneer Global shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings for Alibaba Group and Payoneer Global, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Alibaba Group	0	2	12	0	2.86
Payoneer Global	0	2	6	1	2.89

Alibaba Group currently has a consensus price target of $115.86, suggesting a potential upside of 11.72%. Payoneer Global has a consensus price target of $12.00, suggesting a potential upside of 13.31%. Given Payoneer Global’s stronger consensus rating and higher possible upside, analysts clearly believe Payoneer Global is more favorable than Alibaba Group.

Summary

Payoneer Global beats Alibaba Group 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 Payoneer Global

Payoneer Global Inc. operates as a financial technology company. It operates a payment infrastructure platform that provides customers with a one-stop, global, multi-currency account to serve their accounts receivable and accounts payable needs. The company delivers a suite of services that includes cross-border payments, physical and virtual MasterCard cards, working capital, risk management, and other services. It also offers various payment options with minimal integration required, full back-office functions, and customer support offered. The company's platform delivers bank-grade security, stability, and redundancy. It serves customers, such as small and medium-sized businesses in approximately 190 countries and territories worldwide. Payoneer Global Inc. was founded in 2005 and is headquartered in New York, New York.