Contrasting Etsy (NASDAQ:ETSY) and Travelzoo (NASDAQ:TZOO)

Etsy (NASDAQ:ETSY) and Travelzoo (NASDAQ:TZOO) are both retail/wholesale companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, analyst recommendations, earnings, institutional ownership, profitability, risk and dividends.

Institutional & Insider Ownership

99.5% of Etsy shares are owned by institutional investors. Comparatively, 27.4% of Travelzoo shares are owned by institutional investors. 2.8% of Etsy shares are owned by company insiders. Comparatively, 43.2% of Travelzoo shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Etsy and Travelzoo”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Etsy	$2.84 billion	2.58	$303.28 million	$1.24	59.51
Travelzoo	$83.90 million	1.32	$13.56 million	$0.89	11.35

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Etsy	5.78%	-31.10%	11.14%
Travelzoo	12.32%	1,186.62%	21.51%

Risk & Volatility

Etsy has a beta of 1.85, indicating that its stock price is 85% more volatile than the S&P 500. Comparatively, Travelzoo has a beta of 0.93, indicating that its stock price is 7% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Etsy and Travelzoo, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Etsy	3	17	9	1	2.27
Travelzoo	0	2	3	0	2.60

Etsy presently has a consensus target price of $62.00, indicating a potential downside of 15.98%. Travelzoo has a consensus target price of $21.50, indicating a potential upside of 112.87%. Given Travelzoo’s stronger consensus rating and higher possible upside, analysts plainly believe Travelzoo is more favorable than Etsy.

Summary

Etsy beats Travelzoo on 9 of the 15 factors compared between the two stocks.

About Etsy

Etsy, Inc., together with its subsidiaries, operates two-sided online marketplaces that connect buyers and sellers in the United States, the United Kingdom, Germany, Canada, Australia, and France. Its primary marketplace is Etsy.com that connects artisans and entrepreneurs with various consumers. The company also offers Reverb, a musical instrument marketplace; Depop, a fashion resale marketplace; and Elo7, a Brazil-based marketplace for handmade and unique items. In addition, it offers various seller services, including Etsy Payments, a payment processing service; Etsy Ads, an advertising platform; and Shipping Labels, which allows sellers in the United States, Canada, the United Kingdom, Australia, and India to purchase discounted shipping labels. Further, the company provides the Etsy Purchase Protection program that is designed to help buyers; the Etsy Share and Save program for sellers to save on Etsy fees for sales that drive to their Etsy shop from their own channels. Additionally, it offers educational resources comprising blog posts, video tutorials, Etsy Seller Handbook, Etsy.com online forums, and insights; Etsy Teams, a platform to build personal relationships with other Etsy sellers; and a Star Seller program. The company was formerly known as Indieco, Inc changed its name to Etsy, Inc. in June 2006. Etsy, Inc. was founded in 2005 and is headquartered in Brooklyn, New York.

About Travelzoo

Travelzoo, together with its subsidiaries, operates as an Internet media company that provides travel, entertainment, and local experiences worldwide. It operates in four segments: Travelzoo North America, Travelzoo Europe, Jack's Flight Club, and New Initiatives. The company offers Travelzoo website, Travelzoo Top 20 email newsletters, Standalone email newsletters, Travelzoo Network, Travelzoo mobile applications, Jack's Flight Club website, Jack's Flight Club mobile applications, and Jack's Flight Club newsletters. The company's Travelzoo website and newsletters include local deals and getaways listings that allow members to purchase vouchers for offers from local businesses, such as spas, hotels, and restaurants; Jack's Flight Club, a subscription service that provides members with information about exceptional airfares; and Travelzoo Network, a network of third-party websites that list travel deals published by the company. It serves airlines, hotels, cruise lines, vacations packagers, tour operators, destinations, car rental companies, travel agents, theater and performing arts groups, restaurants, spas, and activity companies. Travelzoo Inc. was incorporated in 1998 and is headquartered in New York, New York.