Travelzoo (NASDAQ:TZOO – Get Rating) and Direct Digital (NASDAQ:DRCT – Get Rating) are both small-cap retail/wholesale companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, valuation, analyst recommendations, profitability, institutional ownership, earnings and risk.
Earnings and Valuation
This table compares Travelzoo and Direct Digital's revenue, earnings per share and valuation.
Get Travelzoo alerts:| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Travelzoo | $63.19 million | 1.04 | $910,000.00 | $0.08 | 66.26 |
| Direct Digital | $38.14 million | 1.02 | -$1.51 million | ($62.19) | -0.04 |
Travelzoo has higher revenue and earnings than Direct Digital. Direct Digital is trading at a lower price-to-earnings ratio than Travelzoo, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a summary of current recommendations for Travelzoo and Direct Digital, as reported by MarketBeat.com.| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Travelzoo | 0 | 1 | 1 | 0 | 2.50 |
| Direct Digital | 0 | 0 | 3 | 0 | 3.00 |
Travelzoo presently has a consensus target price of $13.00, suggesting a potential upside of 145.28%. Direct Digital has a consensus target price of $6.50, suggesting a potential upside of 142.54%. Given Travelzoo's higher possible upside, analysts plainly believe Travelzoo is more favorable than Direct Digital.
Profitability
This table compares Travelzoo and Direct Digital's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Travelzoo | 1.75% | -126.76% | 1.36% |
| Direct Digital | 0.87% | 99.00% | 6.44% |
Insider & Institutional Ownership
28.3% of Travelzoo shares are owned by institutional investors. Comparatively, 7.3% of Direct Digital shares are owned by institutional investors. 47.4% of Travelzoo shares are owned by company insiders. Comparatively, 78.3% of Direct Digital shares are owned by company 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.
Summary
Travelzoo beats Direct Digital on 8 of the 13 factors compared between the two stocks.
About Travelzoo
(Get Rating)
Travelzoo, an Internet media company, provides travel, entertainment, and local deals from travel and entertainment companies, and local businesses in the Asia Pacific, Europe, and North America. Its publications and products include Travelzoo Website; Travelzoo iPhone and Android apps; Travelzoo Top 20 email newsletter; and Newsflash email alert service. The company also operates the Travelzoo Network, a network of third-party Websites that list travel deals published by the company; and Local Deals and Getaway listings, which allow its members to purchase vouchers for deals from local businesses, such as spas, hotels, and restaurants. 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 founded in 1998 and is headquartered in New York, New York.
About Direct Digital
(Get Rating)
Direct Digital Holdings, Inc. operates as an end-to-end full-service programmatic advertising platform. The company's platform primarily focuses on providing advertising technology, data-driven campaign optimization, and other solutions to underserved and less efficient markets on both the buy- and sell-side of the digital advertising ecosystem. It serves various industry verticals, such as travel, healthcare, education, financial services, consumer products, etc. with focus on small- and mid-sized businesses. The company was founded in 2018 and is headquartered in Houston, Texas.
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