Expedia Inc (EXPE), Priceline.com Inc (PCLN): How Does This Internet Travel Company Measure Up?

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Would you like to enjoy a luxurious vacation on the beach? Find an affordable seven-night cruise in Alaska? Plan an itinerary for your European adventure? If so, then Expedia Inc (NASDAQ:EXPE) might be your best option. However, this doesn’t mean Expedia is the best investment option compared to its peers.

Expedia Inc (NASDAQ:EXPE)

As many investors already know, Priceline.com Inc (NASDAQ:PCLN) has been the biggest winner for Internet travel companies over the years. But does that mean it’s the best investment going forward? And what about Tripadvisor Inc (NASDAQ:TRIP)? TripAdvisor has outperformed Expedia and Priceline recently.

EXPE Chart

EXPE data by YCharts

Which site has the best traffic?

According to Alexa.com, TripAdvisor has the most traffic.

Global Rank U.S. Rank
Expedia 523 121
Priceline 775 148
TripAdvisor 238 91

The numbers above should indicate that TripAdvisor has the most potential, but numbers can deceiving. TripAdvisor is the most popular site because travelers leave reviews about their experiences, and because potential travelers read those reviews for information prior to booking a vacation.

However, a site that’s best known for travel reviews isn’t going to have the most revenue potential. Plus, TripAdvisor isn’t the best at keeping its visitors on the page — a key factor for revenue potential.

Pageviews-Per-User Time-On-Site Bounce Rate
Expedia 4.31 5:11 34.50%
Priceline 6.32 5:43 15%
TripAdvisor 4.16 4:18 40.8%

As you can see in the chart above, Priceline.com Inc (NASDAQ:PCLN) dominates in every category. Visitors view more pages, stay on-site longer, and they rarely visit one page and leave. The bounce rate indicates only one pageview per visit. Therefore, you always want to look for a low bounce rate when looking at website analytics.

Other important numbers

Expedia Inc (NASDAQ:EXPE) has a short position of 8.80%. The short interest is high for several reasons:

  1. The stock is currently trading at a lofty 45 times earnings.
  2. The first quarter disappointed
  3. Guidance is weak.
  4. The consumer isn’t gaining strength, which puts a lot of pressure of the travel industry.

Priceline.com Inc (NASDAQ:PCLN) and TripAdvisor are also dealing with an unsure economic environment. However, only TripAdvisor has a similar valuation to Expedia Inc (NASDAQ:EXPE), currently trading at 44 times earnings. Priceline isn’t cheap at 28 times earnings, but it offers the most consistent growth. Priceline’s revenue and earnings have consistently improved on an annual basis, and massive profits have become commonplace.

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