TripAdvisor (NASDAQ:TRIP – Get Free Report) and Reddit (NYSE:RDDT – Get Free Report) are both communication services companies, but which is the superior stock? We will compare the two businesses based on the strength of their valuation, institutional ownership, earnings, risk, profitability, analyst recommendations and dividends.
Profitability
This table compares TripAdvisor and Reddit’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| TripAdvisor | 0.28% | 4.23% | 1.04% |
| 31.35% | 29.02% | 26.32% |
Volatility and Risk
TripAdvisor has a beta of 0.83, indicating that its share price is 17% less volatile than the S&P 500. Comparatively, Reddit has a beta of 2.02, indicating that its share price is 102% more volatile than the S&P 500.
Analyst Recommendations
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| TripAdvisor | 5 | 6 | 4 | 0 | 1.93 |
| 0 | 11 | 17 | 2 | 2.70 |
TripAdvisor currently has a consensus price target of $14.12, indicating a potential upside of 67.54%. Reddit has a consensus price target of $219.29, indicating a potential upside of 51.70%. Given TripAdvisor’s higher possible upside, equities research analysts plainly believe TripAdvisor is more favorable than Reddit.
Earnings & Valuation
This table compares TripAdvisor and Reddit”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| TripAdvisor | $1.89 billion | 0.52 | $40.00 million | $0.01 | 842.50 |
| $2.20 billion | 12.63 | $529.72 million | $4.30 | 33.62 |
Reddit has higher revenue and earnings than TripAdvisor. Reddit is trading at a lower price-to-earnings ratio than TripAdvisor, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
99.0% of TripAdvisor shares are held by institutional investors. 2.0% of TripAdvisor shares are held by insiders. Comparatively, 28.5% of Reddit shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Summary
Reddit beats TripAdvisor on 12 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 Reddit
Reddit, Inc. operates a website that organizes digital communities. It organizes communities based on specific interests that enable users to engage in conversations by sharing experiences, submitting links, uploading images and videos, and replying to one another. The company was founded in 2005 and is headquartered in San Francisco, California.
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