Travelzoo (NASDAQ:TZOO) and Alibaba Group (NYSE:BABA) Financial Contrast

Travelzoo (NASDAQ:TZOO) and Alibaba Group (NYSE:BABA) are both retail/wholesale companies, but which is the superior stock? We will compare the two businesses based on the strength of their profitability, institutional ownership, earnings, risk, dividends, valuation and analyst recommendations.

Analyst Recommendations

This is a summary of recent recommendations for Travelzoo and Alibaba Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Travelzoo	1	1	3	0	2.40
Alibaba Group	1	2	17	0	2.80

Travelzoo currently has a consensus price target of $19.67, indicating a potential upside of 187.10%. Alibaba Group has a consensus price target of $192.11, indicating a potential upside of 27.29%. Given Travelzoo’s higher probable upside, equities research analysts plainly believe Travelzoo is more favorable than Alibaba Group.

Institutional & Insider Ownership

27.4% of Travelzoo shares are held by institutional investors. Comparatively, 13.5% of Alibaba Group shares are held by institutional investors. 43.2% of Travelzoo shares are held by insiders. Comparatively, 12.5% of Alibaba Group shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Travelzoo	8.66%	-446.70%	15.82%
Alibaba Group	12.38%	10.51%	6.18%

Valuation & Earnings

This table compares Travelzoo and Alibaba Group”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Travelzoo	$83.90 million	0.89	$13.56 million	$0.64	10.70
Alibaba Group	$137.30 billion	2.62	$17.93 billion	$7.24	20.85

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

Volatility and Risk

Travelzoo has a beta of 0.86, indicating that its share price is 14% less volatile than the S&P 500. Comparatively, Alibaba Group has a beta of 0.37, indicating that its share price is 63% less volatile than the S&P 500.

Summary

Alibaba Group beats Travelzoo on 9 of the 14 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 Alibaba Group

Alibaba Group Holding Limited, through its subsidiaries, provides technology infrastructure and marketing reach to help merchants, brands, retailers, and other businesses to engage with their users and customers in the People's Republic of China and internationally. The company operates through seven segments: China Commerce, International Commerce, Local Consumer Services, Cainiao, Cloud, Digital Media and Entertainment, and Innovation Initiatives and Others. It operates Taobao, a digital retail platform; Tmall, a third-party online and mobile commerce platform; Alimama, a monetization platform; 1688.com and Alibaba.com, which are online wholesale marketplaces; AliExpress, a retail marketplace; Lazada, Trendyol, and Daraz that are e-commerce platforms; Freshippo, a retail platform for groceries and fresh goods; and Tmall Global, an import e-commerce platform. The company also operates Cainiao Network logistic services platform; Ele.me, an on-demand delivery and local services platform; Koubei, a restaurant and local services guide platform; and Fliggy, an online travel platform. In addition, it offers pay-for-performance, in-feed, and display marketing services; and Taobao Ad Network and Exchange, a real-time online bidding marketing exchange. Further, the company provides elastic computing, storage, network, security, database, big data, and IoT services; and hardware, software license, software installation, and application development and maintenance services. Additionally, it operates Youku, an online video platform; Quark, a platform for information search, storage, and consumption; Alibaba Pictures and other content platforms that provide online videos, films, live events, news feeds, literature, music, and others; Amap, a mobile digital map, navigation, and real-time traffic information app; DingTalk, a business efficiency mobile app; and Tmall Genie smart speaker. The company was incorporated in 1999 and is based in Hangzhou, the People's Republic of China.