Travelzoo (NASDAQ:TZOO – Get Free Report) and Alphabet (NASDAQ:GOOGL – Get Free Report) are both communication services companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, earnings, institutional ownership, dividends, profitability, risk and valuation.
Analyst Ratings
This is a summary of current recommendations for Travelzoo and Alphabet, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Travelzoo | 1 | 1 | 2 | 0 | 2.25 |
| Alphabet | 0 | 5 | 45 | 5 | 3.00 |
Travelzoo presently has a consensus target price of $13.83, indicating a potential upside of 166.54%. Alphabet has a consensus target price of $412.51, indicating a potential upside of 38.10%. Given Travelzoo’s higher possible upside, research analysts clearly believe Travelzoo is more favorable than Alphabet.
Valuation and Earnings
This table compares Travelzoo and Alphabet”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Travelzoo | $91.72 million | 0.58 | $4.70 million | ($0.18) | -28.83 |
| Alphabet | $402.84 billion | 9.12 | $132.17 billion | $19.16 | 15.59 |
Alphabet has higher revenue and earnings than Travelzoo. Travelzoo is trading at a lower price-to-earnings ratio than Alphabet, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
27.4% of Travelzoo shares are held by institutional investors. Comparatively, 40.0% of Alphabet shares are held by institutional investors. 45.3% of Travelzoo shares are held by insiders. Comparatively, 11.6% of Alphabet shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Profitability
This table compares Travelzoo and Alphabet’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Travelzoo | -1.82% | -9.35% | -3.52% |
| Alphabet | 50.03% | 43.33% | 29.24% |
Risk & Volatility
Travelzoo has a beta of 1.47, meaning that its share price is 47% more volatile than the S&P 500. Comparatively, Alphabet has a beta of 1.23, meaning that its share price is 23% more volatile than the S&P 500.
Summary
Alphabet beats Travelzoo on 12 of the 15 factors compared between the two stocks.
About Travelzoo
Travelzoo (NASDAQ: TZOO) is an internet media company that publishes travel and entertainment offers for consumers. Its platform features deals on hotels, vacations, cruises, flights, restaurants, spas, events and other leisure activities, connecting participating businesses with an audience of members and website visitors. The company’s products and services include its travel and local-deals publications, destination and deal guides, and online tools that help users discover and compare travel opportunities.
About Alphabet
Alphabet Inc. is a technology holding company whose largest business is Google. Founded in 1998 by Larry Page and Sergey Brin, Google became part of Alphabet when the company reorganized its businesses under the holding-company structure in 2015. Google’s products and services include Search, YouTube, Android, Chrome, Google Maps, Google Play and Google Cloud. The company also generates revenue from digital advertising and offers devices, subscriptions and artificial intelligence products and services.
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