Critical Survey: TripAdvisor (NASDAQ:TRIP) & Wayfair (NYSE:W)

TripAdvisor (NASDAQ:TRIP) and Wayfair (NYSE:W) are both retail/wholesale companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, institutional ownership, dividends, risk, valuation, profitability and analyst recommendations.

Risk and Volatility

TripAdvisor has a beta of 0.99, meaning that its share price is 1% less volatile than the S&P 500. Comparatively, Wayfair has a beta of 3.31, meaning that its share price is 231% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
TripAdvisor	4.23%	14.77%	3.91%
Wayfair	-2.65%	N/A	-3.77%

Earnings and Valuation

This table compares TripAdvisor and Wayfair”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TripAdvisor	$1.84 billion	0.94	$5.00 million	$0.64	23.13
Wayfair	$12.24 billion	1.23	-$492.00 million	($2.56)	-45.29

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

Analyst Ratings

This is a breakdown of current ratings and target prices for TripAdvisor and Wayfair, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TripAdvisor	5	6	1	1	1.85
Wayfair	2	10	18	2	2.63

TripAdvisor currently has a consensus price target of $16.34, suggesting a potential upside of 10.41%. Wayfair has a consensus price target of $105.29, suggesting a potential downside of 9.19%. Given TripAdvisor’s higher possible upside, equities analysts plainly believe TripAdvisor is more favorable than Wayfair.

Insider and Institutional Ownership

99.0% of TripAdvisor shares are held by institutional investors. Comparatively, 89.7% of Wayfair shares are held by institutional investors. 3.1% of TripAdvisor shares are held by company insiders. Comparatively, 21.9% of Wayfair shares are held 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.

Summary

TripAdvisor beats Wayfair on 8 of the 15 factors compared between the two stocks.

About TripAdvisor

TripAdvisor, Inc. operates as an online travel company, primarily engages in the provision of travel guidance products and services worldwide. The company operates in three segments: Brand Tripadvisor, Viator, and TheFork. The Brand Tripadvisor segment offers travel guidance platforms for travelers to discover, generate, and share authentic user-generated content in the form of ratings and reviews for destinations, points-of-interest, experiences, accommodations, restaurants, and cruises. The Viator's segment provides pure-play experiences online travel agency that comprehensive and connecting travelers to discover and book tours, activities, and attractions from experience operators. TheFork segment provides an online marketplace that enables diners to discover and book online reservations at restaurants. TripAdvisor, Inc. was founded in 2000 and is headquartered in Needham, Massachusetts. Tripadvisor, Inc. is a subsidiary of Liberty TripAdvisor Holdings, Inc.

About Wayfair

Wayfair Inc. provides e-commerce business in the United States and internationally. The company offers approximately thirty million products for the home sector. It offers online selections of furniture, décor, housewares, and home improvement products through its sites consisting of Wayfair, Joss & Main, AllModern, Birch Lane, Perigold, and Wayfair Professional. The company offers its products under the Three Posts and Mercury Row brand name. The company was founded in 2002 and is headquartered in Boston, Massachusetts.