Analyzing TripAdvisor (TRIP) and Travelzoo (TZOO)

TripAdvisor (NASDAQ: TRIP) and Travelzoo (NASDAQ:TZOO) are both retail/wholesale companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, earnings, institutional ownership, profitabiliy, valuation, dividends and risk.

Risk and Volatility

TripAdvisor has a beta of 2.36, suggesting that its share price is 136% 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.

Institutional and Insider Ownership

89.1% of TripAdvisor shares are owned by institutional investors. Comparatively, 24.5% of Travelzoo shares are owned by institutional investors. 1.0% of TripAdvisor shares are owned by insiders. Comparatively, 58.5% of Travelzoo shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares TripAdvisor and Travelzoo’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
TripAdvisor 6.87% 8.87% 5.77%
Travelzoo 5.23% 22.26% 7.72%

Analyst Ratings

This is a summary of current ratings and target prices for TripAdvisor and Travelzoo, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TripAdvisor 5 14 1 0 1.80
Travelzoo 0 0 0 0 N/A

TripAdvisor presently has a consensus price target of $46.21, suggesting a potential upside of 16.85%. Given TripAdvisor’s higher possible upside, analysts plainly believe TripAdvisor is more favorable than Travelzoo.

Earnings and Valuation

This table compares TripAdvisor and Travelzoo’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
TripAdvisor $1.50 billion 3.72 $202.00 million $0.70 56.50
Travelzoo $122.77 million 0.95 $10.15 million $0.45 19.89

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.

Summary

TripAdvisor beats Travelzoo on 10 of the 13 factors compared between the two stocks.

About TripAdvisor

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.

About Travelzoo

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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