Financial Review: Travelzoo (TZOO) & Despegar.com (DESP)
Travelzoo (NASDAQ: TZOO) and Despegar.com (NYSE:DESP) are both small-cap retail/wholesale companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, earnings, dividends, analyst recommendations, institutional ownership, valuation and profitability.
This table compares Travelzoo and Despegar.com’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
23.4% of Travelzoo shares are owned by institutional investors. Comparatively, 72.6% of Despegar.com shares are owned by institutional investors. 58.5% of Travelzoo 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.
This is a breakdown of current ratings and price targets for Travelzoo and Despegar.com, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Despegar.com has a consensus target price of $35.80, indicating a potential upside of 38.76%. Given Despegar.com’s higher possible upside, analysts clearly believe Despegar.com is more favorable than Travelzoo.
Earnings and Valuation
This table compares Travelzoo and Despegar.com’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Travelzoo||$128.55 million||0.58||$6.63 million||$0.28||21.43|
|Despegar.com||$411.16 million||4.22||$17.79 million||$0.53||48.68|
Despegar.com has higher revenue and earnings than Travelzoo. Travelzoo is trading at a lower price-to-earnings ratio than Despegar.com, indicating that it is currently the more affordable of the two stocks.
Despegar.com beats Travelzoo on 7 of the 11 factors compared between the two stocks.
Travelzoo, formerly Travelzoo Inc., is a media commerce company. The Company informs over 28 million members in Asia Pacific, Europe and North America, as well as various Website users, about the travel and entertainment deals available from a range of companies. The Company operates through three segments: Asia Pacific, Europe and North America. The Asia Pacific segment consists of the Company’s operations in Australia, China, Hong Kong, Japan, Taiwan and Southeast Asia. The Europe segment consists of the Company’s operations in France, Germany, Spain and the United Kingdom. The North America segment consists of Travelzoo’s operations in Canada and the United States. Its publications and products include the Travelzoo Websites, the Travelzoo Top 20 e-mail newsletter, the Newsflash e-mail alert service, the SuperSearch pay-per-click travel search tool, and the Travelzoo Network, a network of third-party Websites that list travel deals published by Travelzoo.
Despegar.com Corp is an Argentina-based travel agency. The Company’s activities are divided into two business segments: Air, as well as Packages, Hotels and Other Travel Products. The Air division focuses on the sale of airline tickets. The Packages, Hotels and Other Travel Products division includes sales of travel packages with or without airline tickets and hotel rooms, as well as stand-alone sales of hotel rooms, including vacation rentals, car rentals, bus tickets, cruise tickets, travel insurance and destination services. Its destinations include Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Ecuador, El Salvador, Spain, the United States, Guatemala, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, Puerto Rico, Dominican Republic, Uruguay and Venezuela. The Company operates through a number of subsidiaries in Latin America and the United States.
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