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

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

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 revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TripAdvisor	$1.84 billion	0.88	$5.00 million	$0.64	21.67
Wayfair	$11.85 billion	1.12	-$492.00 million	($2.56)	-39.69

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.

Insider & 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 endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for TripAdvisor and Wayfair, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TripAdvisor	5	6	1	0	1.67
Wayfair	2	10	18	2	2.63

TripAdvisor currently has a consensus price target of $16.25, indicating a potential upside of 17.16%. Wayfair has a consensus price target of $105.29, indicating a potential upside of 3.62%. Given TripAdvisor’s higher probable upside, research analysts clearly believe TripAdvisor is more favorable than Wayfair.

Risk and Volatility

TripAdvisor has a beta of 1.01, indicating that its stock price is 1% more volatile than the S&P 500. Comparatively, Wayfair has a beta of 3.25, indicating that its stock price is 225% more volatile than the S&P 500.

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.