Contrasting Travelzoo (NASDAQ:TZOO) and Alphabet (NASDAQ:GOOGL)

Alphabet (NASDAQ:GOOGL) and Travelzoo (NASDAQ:TZOO) are both communication services companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, valuation, risk, profitability, dividends, earnings and analyst recommendations.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Alphabet	$402.84 billion	10.41	$132.17 billion	$19.91	17.21
Travelzoo	$91.72 million	0.61	$4.70 million	$0.03	183.67

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

Risk & Volatility

Alphabet has a beta of 1.22, indicating that its share price is 22% more volatile than the S&P 500. Comparatively, Travelzoo has a beta of 1.33, indicating that its share price is 33% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Alphabet	54.77%	51.32%	35.42%
Travelzoo	0.51%	-9.35%	1.00%

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Alphabet	0	4	45	5	3.02
Travelzoo	2	0	2	0	2.00

Alphabet currently has a consensus price target of $425.60, suggesting a potential upside of 24.17%. Travelzoo has a consensus price target of $13.83, suggesting a potential upside of 151.06%. Given Travelzoo’s higher probable upside, analysts clearly believe Travelzoo is more favorable than Alphabet.

Insider and Institutional Ownership

40.0% of Alphabet shares are owned by institutional investors. Comparatively, 27.4% of Travelzoo shares are owned by institutional investors. 11.6% of Alphabet shares are owned by insiders. Comparatively, 45.3% of Travelzoo shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

Alphabet beats Travelzoo on 11 of the 15 factors compared between the two stocks.

About Alphabet

Alphabet Inc. offers various products and platforms in the United States, Europe, the Middle East, Africa, the Asia-Pacific, Canada, and Latin America. It operates through Google Services, Google Cloud, and Other Bets segments. The Google Services segment provides products and services, including ads, Android, Chrome, devices, Gmail, Google Drive, Google Maps, Google Photos, Google Play, Search, and YouTube. It is also involved in the sale of apps and in-app purchases and digital content in the Google Play and YouTube; and devices, as well as in the provision of YouTube consumer subscription services. The Google Cloud segment offers infrastructure, cybersecurity, databases, analytics, AI, and other services; Google Workspace that include cloud-based communication and collaboration tools for enterprises, such as Gmail, Docs, Drive, Calendar, and Meet; and other services for enterprise customers. The Other Bets segment sells healthcare-related and internet services. The company was incorporated in 1998 and is headquartered in Mountain View, California.

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.