Reviewing Travelzoo (NASDAQ:TZOO) and Wayfair (NYSE:W)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Travelzoo	14.51%	434.15%	23.97%
Wayfair	-3.01%	N/A	-8.01%

Earnings and Valuation

This table compares Travelzoo and Wayfair”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Travelzoo	$83.90 million	1.75	$13.56 million	$1.00	13.19
Wayfair	$11.85 billion	0.62	-$492.00 million	($2.85)	-19.96

Travelzoo has higher earnings, but lower revenue than Wayfair. Wayfair is trading at a lower price-to-earnings ratio than Travelzoo, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Travelzoo has a beta of 1.13, meaning that its share price is 13% more volatile than the S&P 500. Comparatively, Wayfair has a beta of 2.97, meaning that its share price is 197% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Travelzoo and Wayfair, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Travelzoo	0	0	4	0	3.00
Wayfair	1	11	13	2	2.59

Travelzoo currently has a consensus price target of $25.67, indicating a potential upside of 94.59%. Wayfair has a consensus price target of $45.67, indicating a potential downside of 19.71%. Given Travelzoo’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Travelzoo is more favorable than Wayfair.

Institutional and Insider Ownership

27.4% of Travelzoo shares are owned by institutional investors. Comparatively, 89.7% of Wayfair shares are owned by institutional investors. 43.2% of Travelzoo shares are owned by insiders. Comparatively, 21.9% of Wayfair shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

Travelzoo beats Wayfair on 10 of the 15 factors compared between the two stocks.

About Travelzoo

Travelzoo, together with its subsidiaries, operates as an Internet media company that provides travel, entertainment, and local experiences worldwide. It operates in four segments: Travelzoo North America, Travelzoo Europe, Jack's Flight Club, and New Initiatives. The company offers Travelzoo website, Travelzoo Top 20 email newsletters, Standalone email newsletters, Travelzoo Network, Travelzoo mobile applications, Jack's Flight Club website, Jack's Flight Club mobile applications, and Jack's Flight Club newsletters. The company's Travelzoo website and newsletters include local deals and getaways listings that allow members to purchase vouchers for offers from local businesses, such as spas, hotels, and restaurants; Jack's Flight Club, a subscription service that provides members with information about exceptional airfares; and Travelzoo Network, a network of third-party websites that list travel deals published by the company. It serves airlines, hotels, cruise lines, vacations packagers, tour operators, destinations, car rental companies, travel agents, theater and performing arts groups, restaurants, spas, and activity companies. Travelzoo Inc. was incorporated in 1998 and is headquartered in New York, New York.

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.