What To Expect From TripAdvisor’s Q1?
TripAdvisor (NASDAQ: TRIP) is scheduled to announce its fiscal first quarter results on Tuesday, May 7. In fiscal 2018, the company’s total revenues grew 4% year-over-year (y-o-y) to $1.6 billion. Its adjusted EBITDA grew more than 25% during the same period, largely driven by the Hotel segment’s EBITDA margin expansion. In addition, the company benefited from solid demand for its Non-Hotel business, particularly the Restaurants and Experiences segment. This segment has continued to deliver operational and marketing efficiencies, which has led to solid improvement in its profitability, which we expect to continue in fiscal 2019, as well. In Q1, we expect the company to see y-o-y revenue growth in Q1, as the Non-Hotel business will likely drive its growth.
We have a price estimate for TripAdvisor of $59, which is around 7% ahead of the current market price. We have created an interactive dashboard on How Is TripAdvisor Likely To Have Fared In Q1 2019, which details our key forecasts and estimates for the company for fiscal 2019. In addition, you can see more of our Information Technology company data here.
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Segment Expectations
- TripAdvisor’s Hotel segment: It accounts for almost 80% of the company’s revenues.
- In fiscal 2018, the company’s revenues declined moderately in its core hotel-booking segment to $1.2 billion, even as profitability spiked in the division during the same period.
- Management expects the segment to see slight declines in fiscal 2019 as well, due to a continued negative impact from marketing pullbacks and some additional currency headwinds in the fiscal first half. However, the segment’s profitability will likely remain strong on the back of its lower cost base and more restrained spending.
- We expect TripAdvisor’s Hotel segment to generate about $279 million in revenue in Q1 2019 from Click-Based and Transaction revenues, Display-Based Advertising and Subscription revenue, and Other Hotel revenues.
- The company has been seeing decreased visitors (or hotel shoppers) on its primary website over recent years (except in Q4 2018), where direct suppliers and Online Travel Agencies (OTA) place their advertisements, due to increased competition. To add to that, declining revenue per hotel shopper has also weighed on the company’s revenues of late. We expect this metric to decline going forward, putting further pressure on the company’s Hotel revenue growth in Q1.
- TripAdvisor’s Non-Hotel segment: It is broken down into Experiences, Restaurants, and Rentals.
- In fiscal 2018, the segment’s revenue jumped 27% to $460 million. The segment has been profitable but is still largely in growth mode as management focuses on adding to its portfolio of bookable products in hopes of capturing a dominant position in this high-growth market. The company expects this segment to grow at a similar pace as last year in fiscal 2019, with rentals weighing marginally on it.
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