The Priceline Group (NASDAQ: PCLN) and TripAdvisor (NASDAQ:TRIP) are both mid-cap retail/wholesale companies, but which is the superior business? We will compare the two businesses based on the strength of their profitabiliy, valuation, risk, institutional ownership, earnings, analyst recommendations and dividends.

Volatility & Risk

The Priceline Group has a beta of 1.41, meaning that its share price is 41% more volatile than the S&P 500. Comparatively, TripAdvisor has a beta of 2.35, meaning that its share price is 135% more volatile than the S&P 500.

Profitability

This table compares The Priceline Group and TripAdvisor’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
The Priceline Group 20.12% 33.94% 16.53%
TripAdvisor 6.87% 8.87% 5.77%

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for The Priceline Group and TripAdvisor, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
The Priceline Group 0 5 24 0 2.83
TripAdvisor 5 16 1 0 1.82

The Priceline Group presently has a consensus target price of $1,952.88, suggesting a potential downside of 2.11%. TripAdvisor has a consensus target price of $48.27, suggesting a potential upside of 28.57%. Given TripAdvisor’s higher probable upside, analysts clearly believe TripAdvisor is more favorable than The Priceline Group.

Valuation & Earnings

This table compares The Priceline Group and TripAdvisor’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
The Priceline Group $11.01 billion 8.90 $4.17 billion $44.31 45.02
TripAdvisor $1.50 billion 3.53 $202.00 million $0.70 53.63

The Priceline Group has higher revenue and earnings than TripAdvisor. The Priceline Group is trading at a lower price-to-earnings ratio than TripAdvisor, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

95.2% of The Priceline Group shares are owned by institutional investors. Comparatively, 89.6% of TripAdvisor shares are owned by institutional investors. 0.4% of The Priceline Group shares are owned by insiders. Comparatively, 1.0% of TripAdvisor shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

The Priceline Group beats TripAdvisor on 10 of the 14 factors compared between the two stocks.

The Priceline Group Company Profile

The Priceline Group Inc. is a provider of travel and restaurant online reservation and related services. The Company, through its online travel companies (OTCs), connects consumers wishing to make travel reservations with providers of travel services across the world. It offers consumers an array of accommodation reservations (including hotels, bed and breakfasts, hostels, apartments, vacation rentals and other properties) through its Booking.com, priceline.com and agoda.com brands. Its other brands include KAYAK, Rentalcars.com and OpenTable, Inc. (OpenTable). As of December 31, 2016, Booking.com offered accommodation reservation services for over 1,115,000 properties in over 220 countries and territories on its various Websites and in over 40 languages, which included over 568,000 vacation rental properties (updated property counts were available on the Booking.com Website).

TripAdvisor Company Profile

TripAdvisor, Inc. owns and operates a portfolio of online travel brands. TripAdvisor, the Company’s brand, is a travel site. The Company operates through two segments: Hotel and Non-Hotel. The Company’s Hotel segment includes click-based advertising and transaction; display-based and subscription-based advertising, and other hotel operations. The Non-Hotel segment includes Attractions, Restaurants and Vacation Rentals businesses. The Company’s platform also enables users to compare real-time pricing and availability for these experiences, as well as to book hotels, flights, cruises, vacation rentals, tours, activities and attractions, and restaurants, on either a TripAdvisor site or application, or a travel partner site or application. As of December 31, 2016, the Company’s TripAdvisor-branded Websites included tripadvisor.com in the United States and localized versions of the TripAdvisor Website in 48 markets and 28 languages around the world.

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