Critical Review: Baozun (NASDAQ:BZUN) versus Grove Collaborative (NYSE:GROV)

Baozun (NASDAQ:BZUN) and Grove Collaborative (NYSE:GROV) are both small-cap computer and technology companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, analyst recommendations, dividends, risk, earnings, valuation and institutional ownership.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Baozun and Grove Collaborative, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Baozun	0	2	1	0	2.33
Grove Collaborative	0	0	1	0	3.00

Baozun presently has a consensus target price of $3.20, suggesting a potential upside of 9.22%. Grove Collaborative has a consensus target price of $2.00, suggesting a potential upside of 14.29%. Given Grove Collaborative’s stronger consensus rating and higher probable upside, analysts clearly believe Grove Collaborative is more favorable than Baozun.

Earnings & Valuation

This table compares Baozun and Grove Collaborative”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Baozun	$8.97 billion	0.02	-$39.22 million	($0.54)	-5.43
Grove Collaborative	$213.78 million	0.32	-$43.23 million	($0.69)	-2.54

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

Risk and Volatility

Baozun has a beta of 0.31, meaning that its stock price is 69% less volatile than the S&P 500. Comparatively, Grove Collaborative has a beta of 1.08, meaning that its stock price is 8% more volatile than the S&P 500.

Insider & Institutional Ownership

47.3% of Baozun shares are held by institutional investors. Comparatively, 91.6% of Grove Collaborative shares are held by institutional investors. 59.2% of Baozun shares are held by company insiders. Comparatively, 13.1% of Grove Collaborative shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Baozun and Grove Collaborative’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Baozun	-2.55%	-5.58%	-2.33%
Grove Collaborative	-11.35%	-417.96%	-14.19%

Summary

Baozun beats Grove Collaborative on 7 of the 13 factors compared between the two stocks.

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.

About Grove Collaborative

Grove Collaborative Holdings, Inc. operates as a plastic neutral consumer products retailer in the United States. It offers household, personal care, beauty, and other consumer products through retail channels, third parties, direct-to-consumer platform, and mobile applications, as well as online store. The company is headquartered in San Francisco, California.