TripAdvisor (NASDAQ: TRIP) and Travelzoo (NASDAQ:TZOO) are both retail/wholesale companies, but which is the superior investment? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, institutional ownership, earnings, dividends, profitabiliy and risk.
This table compares TripAdvisor and Travelzoo’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Risk & Volatility
TripAdvisor has a beta of 2.35, suggesting that its share price is 135% more volatile than the S&P 500. Comparatively, Travelzoo has a beta of 1.46, suggesting that its share price is 46% more volatile than the S&P 500.
Earnings & Valuation
This table compares TripAdvisor and Travelzoo’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|TripAdvisor||$1.50 billion||3.45||$202.00 million||$0.70||52.34|
|Travelzoo||$126.15 million||1.14||$12.29 million||$0.54||20.37|
TripAdvisor has higher revenue and earnings than Travelzoo. Travelzoo is trading at a lower price-to-earnings ratio than TripAdvisor, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
90.0% of TripAdvisor shares are held by institutional investors. Comparatively, 24.4% of Travelzoo shares are held by institutional investors. 1.0% of TripAdvisor shares are held by insiders. Comparatively, 58.5% of Travelzoo shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
This is a breakdown of current recommendations and price targets for TripAdvisor and Travelzoo, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
TripAdvisor presently has a consensus target price of $48.27, suggesting a potential upside of 31.73%. Given TripAdvisor’s higher possible upside, equities analysts plainly believe TripAdvisor is more favorable than Travelzoo.
TripAdvisor beats Travelzoo on 10 of the 13 factors compared between the two stocks.
TripAdvisor, Inc. owns and operates a portfolio of online travel brands. TripAdvisor, the Company’s brand, is a travel site. The Company operates through two segments: Hotel and Non-Hotel. The Company’s Hotel segment includes click-based advertising and transaction; display-based and subscription-based advertising, and other hotel operations. The Non-Hotel segment includes Attractions, Restaurants and Vacation Rentals businesses. The Company’s platform also enables users to compare real-time pricing and availability for these experiences, as well as to book hotels, flights, cruises, vacation rentals, tours, activities and attractions, and restaurants, on either a TripAdvisor site or application, or a travel partner site or application. As of December 31, 2016, the Company’s TripAdvisor-branded Websites included tripadvisor.com in the United States and localized versions of the TripAdvisor Website in 48 markets and 28 languages around the world.
Travelzoo, formerly Travelzoo Inc., is a media commerce company. The Company informs over 28 million members in Asia Pacific, Europe and North America, as well as various Website users, about the travel and entertainment deals available from a range of companies. The Company operates through three segments: Asia Pacific, Europe and North America. The Asia Pacific segment consists of the Company’s operations in Australia, China, Hong Kong, Japan, Taiwan and Southeast Asia. The Europe segment consists of the Company’s operations in France, Germany, Spain and the United Kingdom. The North America segment consists of Travelzoo’s operations in Canada and the United States. Its publications and products include the Travelzoo Websites, the Travelzoo Top 20 e-mail newsletter, the Newsflash e-mail alert service, the SuperSearch pay-per-click travel search tool, and the Travelzoo Network, a network of third-party Websites that list travel deals published by Travelzoo.
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