Critical Comparison: Expedia (EXPE) and Despegar Com (DESP)

Expedia (NASDAQ: EXPE) and Despegar Com (NYSE:DESP) are both cyclical consumer goods & services companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, profitability, dividends, valuation, risk, earnings and institutional ownership.

Profitability

This table compares Expedia and Despegar Com’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Expedia 4.09% 10.71% 3.52%
Despegar Com N/A N/A N/A

Dividends

Expedia pays an annual dividend of $1.20 per share and has a dividend yield of 1.0%. Despegar Com does not pay a dividend. Expedia pays out 47.4% of its earnings in the form of a dividend.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Expedia and Despegar Com, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Expedia 0 8 19 1 2.75
Despegar Com 0 2 3 0 2.60

Expedia currently has a consensus target price of $159.86, suggesting a potential upside of 27.71%. Despegar Com has a consensus target price of $35.80, suggesting a potential upside of 26.19%. Given Expedia’s stronger consensus rating and higher possible upside, analysts plainly believe Expedia is more favorable than Despegar Com.

Insider & Institutional Ownership

84.0% of Expedia shares are owned by institutional investors. Comparatively, 72.6% of Despegar Com shares are owned by institutional investors. 21.0% of Expedia 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.

Valuation & Earnings

This table compares Expedia and Despegar Com’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Expedia $8.77 billion 2.17 $281.84 million $2.53 49.47
Despegar Com $411.16 million 4.64 $17.79 million N/A N/A

Expedia has higher revenue and earnings than Despegar Com.

Summary

Expedia beats Despegar Com on 12 of the 14 factors compared between the two stocks.

Expedia Company Profile

Expedia, Inc. is an online travel company. The Company operates through four segments: Core Online Travel Agencies (Core OTA), trivago, Egencia and HomeAway. The Company’s Core OTA segment provides a range of travel and advertising services to its customers across the world, through a range of brands, including Expedia.com and Hotels.com in the United States, and localized Expedia and Hotels.com Websites throughout the world, Orbitz.com, Expedia Affiliate Network, Hotwire.com, Travelocity, Wotif Group, CarRentals.com and Classic Vacations. The Company’s trivago segment sends referrals to online travel companies and travel service providers from its hotel metasearch Websites. Its Egencia segment, which also includes Orbitz Worldwide (Orbitz) for Business, provides managed travel services to corporate customers across the world. The Company’s HomeAway segment operates an online marketplace for the vacation rental industry.

Despegar Com Company Profile

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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