Financial Review: Liberty Interactive Corp (LINTA) vs. Wayfair (W)

Liberty Interactive Corp (NASDAQ: LINTA) and Wayfair (NYSE:W) are both cyclical consumer goods & services companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, risk, institutional ownership, earnings, analyst recommendations, valuation and dividends.

Institutional and Insider Ownership

66.2% of Wayfair shares are held by institutional investors. 56.9% of Wayfair shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings for Liberty Interactive Corp and Wayfair, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Liberty Interactive Corp 0 0 0 0 N/A
Wayfair 0 7 13 0 2.65

Wayfair has a consensus price target of $77.07, indicating a potential upside of 7.91%. Given Wayfair’s higher possible upside, analysts clearly believe Wayfair is more favorable than Liberty Interactive Corp.

Profitability

This table compares Liberty Interactive Corp and Wayfair’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Liberty Interactive Corp 5.12% 9.05% 3.44%
Wayfair -5.10% -335.44% -27.19%

Valuation and Earnings

This table compares Liberty Interactive Corp and Wayfair’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Liberty Interactive Corp N/A N/A N/A N/A N/A
Wayfair $3.93 billion 1.58 -$148.55 million ($2.34) -30.52

Liberty Interactive Corp has higher revenue, but lower earnings than Wayfair.

Summary

Wayfair beats Liberty Interactive Corp on 5 of the 8 factors compared between the two stocks.

Liberty Interactive Corp Company Profile

Liberty Interactive Corporation owns interests in subsidiaries and other companies, which are primarily engaged in the video and online commerce industries. Through its subsidiaries and affiliates, the Company operates in North America, Europe and Asia. Its principal businesses and assets include its subsidiaries QVC, Inc. (QVC), zulily, llc (zulily) and and Evite, Inc. (Evite). The Company’s segments include QVC, zulily, and Corporate and other. Evite is an online invitation and social event planning service on the Web. As of December 31, 2016, QVC marketed and sold a range of consumer products primarily through live merchandise-focused televised shopping programs distributed to approximately 362 million households each day and through its Websites, including QVC.com, and other interactive media, such as mobile applications. Zulily’s merchandise includes women’s, children’s and men’s apparel, children’s merchandise and other products, such as kitchen accessories and home decor.

Wayfair Company Profile

Wayfair Inc. (Wayfair) offers browsing, merchandising and product discovery for a range of products from various suppliers. The Company operates through two segments: U.S. and International. The U.S. segment consists of amounts earned through product sales through the Company’s five sites in the United States and through sites operated by third parties in the United States. The International segment consists of amounts earned through product sales through its international sites. It has an online selection of furniture, decor, decorative accents, housewares, seasonal decor and other home goods. As of December 31, 2016, it had offered five sites, including Websites, mobile-optimized Websites and mobile applications: Wayfair, Joss & Main, AllModern, DwellStudio and Birch Lane. Wayfair is an online destination for all things home. Birch Lane offers a collection of furnishings and home decor. Its sites feature certain products under its house brands, such as Three Posts and Mercury Row.

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