Groupon (NASDAQ:GRPN – Get Free Report) and TripAdvisor (NASDAQ:TRIP – Get Free Report) are both retail/wholesale companies, but which is the better stock? We will contrast the two companies based on the strength of their earnings, institutional ownership, profitability, analyst recommendations, risk, valuation and dividends.
Risk and Volatility
Groupon has a beta of 1.15, indicating that its stock price is 15% more volatile than the S&P 500. Comparatively, TripAdvisor has a beta of 1.3, indicating that its stock price is 30% more volatile than the S&P 500.
Earnings & Valuation
This table compares Groupon and TripAdvisor”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Groupon | $492.56 million | 2.71 | -$59.03 million | ($0.24) | -137.42 |
| TripAdvisor | $1.84 billion | 1.39 | $5.00 million | $0.37 | 48.57 |
TripAdvisor has higher revenue and earnings than Groupon. Groupon is trading at a lower price-to-earnings ratio than TripAdvisor, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
90.1% of Groupon shares are owned by institutional investors. Comparatively, 99.0% of TripAdvisor shares are owned by institutional investors. 35.7% of Groupon shares are owned by company insiders. Comparatively, 3.1% of TripAdvisor shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Profitability
This table compares Groupon and TripAdvisor’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Groupon | -1.89% | -19.61% | -1.45% |
| TripAdvisor | 3.53% | 11.60% | 3.65% |
Analyst Ratings
This is a summary of current recommendations for Groupon and TripAdvisor, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Groupon | 1 | 0 | 4 | 0 | 2.60 |
| TripAdvisor | 2 | 9 | 0 | 0 | 1.82 |
Groupon currently has a consensus target price of $28.00, indicating a potential downside of 15.10%. TripAdvisor has a consensus target price of $16.7250, indicating a potential downside of 6.93%. Given TripAdvisor’s higher possible upside, analysts clearly believe TripAdvisor is more favorable than Groupon.
Summary
TripAdvisor beats Groupon on 10 of the 14 factors compared between the two stocks.
About Groupon
Groupon, Inc., together with its subsidiaries, operates a marketplace that connects consumers to merchants. It operates in two segments, North America and International. The company sells goods or services on behalf of third-party merchants. It serves customers through its mobile applications and websites. The company was formerly known as ThePoint.com, Inc. and changed its name to Groupon, Inc. in October 2008. Groupon, Inc. was incorporated in 2008 and is headquartered in Chicago, Illinois.
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.
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