Critical Analysis: Trip.com Group (NASDAQ:TCOM) & DLocal (NASDAQ:DLO)

Trip.com Group (NASDAQ:TCOM) and DLocal (NASDAQ:DLO) are both consumer discretionary companies, but which is the better investment? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, earnings, profitability, dividends, risk and institutional ownership.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Trip.com Group and DLocal, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Trip.com Group	0	2	8	0	2.80
DLocal	0	7	2	0	2.22

Trip.com Group currently has a consensus price target of $63.38, suggesting a potential upside of 48.25%. DLocal has a consensus price target of $12.50, suggesting a potential upside of 49.34%. Given DLocal’s higher probable upside, analysts plainly believe DLocal is more favorable than Trip.com Group.

Risk & Volatility

Trip.com Group has a beta of 0.42, indicating that its share price is 58% less volatile than the S&P 500. Comparatively, DLocal has a beta of 0.74, indicating that its share price is 26% less volatile than the S&P 500.

Profitability

This table compares Trip.com Group and DLocal’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Trip.com Group	22.99%	10.73%	5.93%
DLocal	18.83%	35.20%	14.49%

Institutional and Insider Ownership

35.4% of Trip.com Group shares are owned by institutional investors. Comparatively, 90.1% of DLocal shares are owned by institutional investors. 23.0% of Trip.com Group shares are owned by insiders. Comparatively, 45.4% of DLocal shares are owned by 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.

Earnings & Valuation

This table compares Trip.com Group and DLocal’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Trip.com Group	$47.22 billion	0.58	$1.40 billion	$2.22	19.26
DLocal	$707.64 million	3.50	$148.96 million	$0.44	19.02

Trip.com Group has higher revenue and earnings than DLocal. DLocal is trading at a lower price-to-earnings ratio than Trip.com Group, indicating that it is currently the more affordable of the two stocks.

About Trip.com Group

Trip.com Group Limited, through its subsidiaries, operates as a travel service provider for accommodation reservation, transportation ticketing, packaged tours and in-destination, corporate travel management, and other travel-related services in China and internationally. The company acts as an agent for hotel-related transactions and selling air tickets, as well as provides train, long-distance bus, and ferry tickets; travel insurance products, such as flight delay, air accident, and baggage loss coverage; and air-ticket delivery, online check-in and seat selection, express security screening, real-time flight status tracker, and airport VIP lounge services. It also provides independent leisure travelers bundled packaged-tour products comprising group, semi-group, and customized and packaged tours with various transportation arrangements, including air, cruise, bus, and car rental services. In addition, the company offers integrated transportation and accommodation services; destination transportation and ticket, activity, insurance, visa, and tour guide services; user support, supplier management, and customer relationship management services; and in-destination products and services. Further, It provides its corporate clients with business visit, incentive trip, meeting and conference, travel data collection and analysis, and industry benchmarking solutions; and Corporate Travel Management System, an online platform that integrates information management, online booking and authorization, online inquiry, and travel reporting systems. Additionally, the company offers online advertising and financial services, such as marketing planning and travel media services. It operates under the Ctrip, Qunar, Trip.com, and Skyscanner brands. The company was formerly known as Ctrip.com International, Ltd. and changed its name to Trip.com Group Limited in October 2019. Trip.com Group Limited was founded in 1999 and is based in Singapore.

About DLocal

DLocal Limited operates a payment processing platform worldwide. The company offers pay-in solution which the business and get paid for their products and services through various payment methods, including international and local cards, online bank transfers and direct debit, cash, and alternative payment methods. It also provides pay-out solution used for merchants to scale pay-out operations. In addition, the company offers dLocal for Platforms, an end-to-end payment solution that offers a range of services to help platforms manage payments. It serves its products to commerce, streaming, ride-hailing, financial services, advertising, SaaS, travel, e-learning, on-demand delivery, and gaming and crypto industries. DLocal Limited was founded in 2016 and is headquartered in Montevideo, Uruguay.