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

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

Risk & Volatility

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

Analyst Recommendations

This is a summary of current recommendations and price targets for Wayfair and TripAdvisor, as provided by MarketBeat.

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

Wayfair currently has a consensus price target of $105.29, indicating a potential upside of 1.71%. TripAdvisor has a consensus price target of $16.25, indicating a potential upside of 14.60%. Given TripAdvisor’s higher possible upside, analysts clearly believe TripAdvisor is more favorable than Wayfair.

Valuation and Earnings

This table compares Wayfair and TripAdvisor”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Wayfair	$11.85 billion	1.14	-$492.00 million	($2.56)	-40.43
TripAdvisor	$1.84 billion	0.90	$5.00 million	$0.64	22.16

TripAdvisor has lower revenue, but higher earnings 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

89.7% of Wayfair shares are owned by institutional investors. Comparatively, 99.0% of TripAdvisor shares are owned by institutional investors. 21.9% of Wayfair shares are owned by insiders. Comparatively, 3.1% of TripAdvisor shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

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

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

Summary

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

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.

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.