If you looked at the recent stock performances of TripAdvisor (NASDAQ:TRIP) and Booking Holdings (NASDAQ:BKNG), TripAdvisor has been, by far, the better investment. But zooming out to look at their respective price changes over the last several years tells a much different story.

Which story should investors believe? The long-term results of Booking Holdings or the short-term momentum of TripAdvisor?

TRIP Chart

TripAdvisor vs. Booking Holdings Stock Performance, data by YCharts.

TRIP Chart

TripAdvisor vs. Booking Holdings Stock Performance, data by YCharts.

While TripAdvisor has recently shown signs of a turnaround, Booking Holdings is still a better buy for growth investors. Here's why.

Growth stocks grow the top line

TripAdvisor posted better-than-expected revenue growth in the first quarter. Unfortunately, that doesn't mean much when analysts are expecting a revenue decline. TripAdvisor improved its top line just 1.6% in the first quarter.

By comparison, Booking Holdings produced year-over-year revenue growth of 21% last quarter. Importantly, the company has seen accelerating growth over the last few years, spurred by its continual acquisitions of smaller online travel agencies and travel search companies.

TRIP Revenue (Quarterly YoY Growth) Chart

TripAdvisor vs. Booking Holdings Quarterly Revenue Growth, data by YCharts.

What makes TripAdvisor's poor revenue growth especially disappointing is that it's actually driving substantially more traffic to its website. Unique visitors increased 12% to 433 million in the first quarter. What's more, those users are increasingly engaged, with user reviews and opinions up 26% year over year. But TripAdvisor has done a poor job of monetizing those users, as evidenced by its weak revenue growth.

Meanwhile, Booking Holdings guided for a significant slowdown in revenue growth in the second quarter, as gross bookings decelerate to 10% to 14% growth. That's likely due in part to a pullback on advertising on websites like TripAdvisor's. But Booking is finding its ad spending is becoming more efficient and it's also seen a higher take rate on booking revenue.

Room for improvement at the margins

Booking Holdings has produced a relatively flat operating margin over the last five years. That's not great, but it's significantly better than the steep decline in operating margin for TripAdvisor.

TRIP Operating Margin (TTM) Chart

TripAdvisor vs. Booking Holdings Operating Margin Performance, data by YCharts.

More importantly, Booking stands to see meaningful profit margin expansion going forward as it focuses on its performance marketing return on investment. Further leveraging fixed costs can help expand its profit margin as well.

TripAdvisor should be able to improve its operating margin, which plummeted to 7.7% in the first quarter of this year. Management expects a long-term earnings before interest, taxes, depreciation, and amortization (EBITDA) margin in the mid-to-high 20% range, so it sees lots of room for improvement. Still, that's well below Booking's current operating margin in the mid-30% range.

A silhouette of a person looking out the window at an airport at an airplane taking off.

Image source: Getty Images.

Booking is growing revenue at a faster pace than TripAdvisor, and it should continue to do so into the next decade. That, combined with more modest margin expansion, ought to provide it with similar net income growth as TripAdvisor with less risk along the way.

Booking Holdings stock trades for a PEG ratio of 1.47 based on analysts' expectations for this year and the next five years. TripAdvisor's PEG is 2.15. Considering the better value of Booking stock compared to TripAdvisor's, and the clearer path to continued growth, it's a much better growth stock for investors interested in the online travel space.