Model N (NYSE:MODN) and Tripadvisor (NASDAQ:TRIP) are both computer and technology companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, institutional ownership, dividends, risk, earnings, analyst recommendations and profitability.

Risk and Volatility

Model N has a beta of 0.7, meaning that its stock price is 30% less volatile than the S&P 500. Comparatively, Tripadvisor has a beta of 1.75, meaning that its stock price is 75% more volatile than the S&P 500.

Insider and Institutional Ownership

68.7% of Model N shares are held by institutional investors. Comparatively, 87.9% of Tripadvisor shares are held by institutional investors. 18.9% of Model N shares are held by company insiders. Comparatively, 3.1% of Tripadvisor shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings for Model N and Tripadvisor, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Model N 0 2 3 0 2.60
Tripadvisor 2 15 2 1 2.10

Model N currently has a consensus target price of $23.25, indicating a potential upside of 55.10%. Tripadvisor has a consensus target price of $46.73, indicating a potential upside of 3.85%. Given Model N’s stronger consensus rating and higher probable upside, analysts clearly believe Model N is more favorable than Tripadvisor.

Earnings & Valuation

This table compares Model N and Tripadvisor’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Model N $131.17 million 3.57 -$39.54 million ($0.83) -18.06
Tripadvisor $1.56 billion 3.98 -$19.00 million $0.48 93.75

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

Profitability

This table compares Model N and Tripadvisor’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Model N -21.89% -61.62% -14.54%
Tripadvisor -1.40% 4.36% 2.63%

Summary

Tripadvisor beats Model N on 11 of the 15 factors compared between the two stocks.

About Model N

Model N, Inc. provides revenue management cloud solutions for the life sciences, technology, and manufacturing companies. The company's cloud-based revenue management solutions include Revenue Cloud for Pharma, Revenue Cloud for Med Tech, Revenue Cloud for High Tech, and Revenue Cloud. It develops software applications, such as managed care and government pricing for life science companies; and channel incentives for technology companies. The company also offers revenue management processes, such as pricing, contracting, rebates, incentives, channel management, and regulatory compliance. In addition, Model N, Inc. provides implementation, managed, strategic, and customer support services. It primarily serves large and mid-sized organizations worldwide through its direct sales force. Model N, Inc. was founded in 1999 and is headquartered in San Mateo, California, with additional offices in the United States, India, and Switzerland.

About Tripadvisor

TripAdvisor, Inc. operates as an online travel company. The company operates in two segments, Hotel and Non-Hotel. Its travel platform aggregates reviews and opinions of members about destinations, accommodations, activities and attractions, and restaurants, which enables users to research and plan their travel experiences, as well as book hotels, flights, cruises, vacation rentals, tours, activities and attractions, and restaurant reservations on its site or mobile app, or on the site or app of travel partner sites. The company operates TripAdvisor-branded Websites, including tripadvisor.com in the United States; and localized versions of the Website in 48 markets and 28 languages. It also manages and operates 20 other media brands that provide users the comprehensive travel-planning and trip-taking resources in the travel industry, such as airfarewatchdog.com, bookingbuddy.com, citymaps.com, cruisecritic.com, familyvacationcritic.com, flipkey.com, thefork.com, gateguru.com, holidaylettings.co.uk, holidaywatchdog.com, housetrip.com, jetsetter.com, niumba.com, onetime.com, oyster.com, seatguru.com, smartertravel.com, tingo.com, vacationhomerentals.com, and viator.com. The company's Websites feature 600 million reviews and opinions on 7.5 million places comprising 1.2 million hotels, inns, B&Bs, and specialty lodging; 750,000 vacation rentals; 4.6 million restaurants; and 915,000 activities and attractions worldwide. TripAdvisor, Inc. was founded in 2000 and is headquartered in Needham, Massachusetts.

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