Maybe it's unfair to compare them, but having read this hot on the heels of The War of the Worlds, I liked The Time Machine better. On thematic grounds it's a close battle, but The Time Machine is a far superior story, hands down.
I'm not even going to touch the whole "time travel" concept as Wells presents it in this book, both because it was written in 1895 and because science fiction has so thoroughly confused the matter that trying to claim something "accurately" depicts time travel is always going to be specious. The main character has a time machine and he goes forward (then backward) in time. Got it? Good.
As with The War of the Worlds, precious few characters have names. In fact, I counted a grand total of two named characters: Filby, "an argumentative person with red hair" and Weena, an Eloi woman who befriends the Time Traveller. We never learn the name of the Time Traveller or the narrator of the book. Still, Wells somehow manages to pull this off with aplomb. And this time, he's even somehow acquired a story to mix in among his speculation and political theory!
Wells' Time Traveller builds his time machine in the hopes of going into the far future, where humanity will have solved all the problems looming ominously in the near future as Britain enters the 20th century. So when the Time Traveller arrives in 802,701, naturally he's pleased to find out that humanity has split up into two species, neither of whom retain the capacity for abstract thought, let alone solutions to all our problems. The happy-go-lucky, child-like Eloi live in a state of daytime bliss punctuated by their nightly Fear of the dark-loving, subterranean Morlocks. The Morlocks make off with the Time Traveller's machine, so he has to live with the Eloi while he plots to recapture it.
The Eloi and the Morlocks are the result of the ultimate separation of humanity, according to the Time Traveller, into a leisure-loving aristocracy (the Eloi) and the service-loving labourers (the Morlocks)—capitalism carried to its logical evolutionary extreme. Political theory aside, there's unquestionable, if unoriginal, validity in the statement that "the cause of human intelligence and vigour" is "hardship and freedom." Unfortunately, Wells never really advances beyond this basic thesis. We never learn if the example he sets during his confrontation with the Morlocks inspires the Eloi to improve themselves or not.
Despite Wells' enthusiastic confidence that the march of science would one day provide the answer to our problems, the Time Traveller, as his representative of the scientific genius, is far from a paragon. Indeed, he displays almost instinctual vitriol toward the ape-like Morlocks. The Eloi, on the other hand, "had kept too much of the human form not to claim my sympathy" despite "their intellectual degradation." To the Time Traveller, Beauty is Good and Ugly is Bad. Some readers may take this as a lack of depth on Wells' part; I interpret it as evidence of depth of character in the Time Traveller—that is, he's not all the virtuous hero; he occasionally succumbs to the prejudices of his era.
The Time Machine is a conflict-laden adventure backed by some interesting ideas, the best of both worlds, unified by Wells' trademark descriptive style. It's a "what if" story, a story of wonder—one-hit wonder. And in that limited respect, while short, it's satisfying.