Tripadvisor’s Stock Down 10% This Year, What’s Next?

TRIP: Tripadvisor logo

After a 10% decline year-to-date (YTD), at the current price of around $16 per share, we believe Tripadvisor’s stock (NASDAQ: TRIP), an online travel company providing booking for hotel reservations, transportation, lodging, and travel experiences, could see pressure in the short term but high growth in the medium to long term.  TRIP stock has declined from around $18 to $16 YTD, underperforming the broader indices, with the S&P growing 13% during the same period. The company’s financial results for both 2020 and 2021 were significantly impacted due to the decrease in travel demand related to Covid-19. However, TRIP experienced a recovery in travel demand and strong growth in gross bookings from pre-Covid levels in 2022. The company’s stock has declined recently post the mixed first-quarter results. Rising costs have been impacting the company’s profitability. However, Tripadvisor’s Viator segment appears to be growing rapidly and is now making up a significant portion of total revenue. Additionally, the company appears to have ample liquidity with $1.1 billion in cash on the balance sheet, and about $500 million and $345 million in long-term debt maturities in 2025 and 2026 respectively.

Tripadvisor’s sales shot higher in the Q1 period as compared to pandemic-pressured results a year ago. The company’s revenues rose 42% year-over-year (y-o-y) to $371 million, and beat market expectations by $11 million. The Viator segment delivered a particularly strong performance as revenue more than doubled y-o-y to $115 million. Yet the business wasn’t able to profit from that higher revenue base. For the first quarter, the travel platform posted $0.05 in adjusted earnings per share, one cent short of expectations. Its GAAP earnings came in at a loss of $0.52 in Q1 2023 compared to a loss of $0.24. The company spent aggressively on marketing and technology development, especially in the Viator and core Tripadvisor platforms.

We have revised Tripadvisor’s valuation to $20 per share, based on a $1.24 expected EPS and a 16.1x P/E multiple for the fiscal year 2023 – almost 23% higher than the current market price. We forecast Tripadvisor’s Revenues to be $1.7 billion for the fiscal year 2023, up 16% y-o-y.

Relevant Articles
  1. Gaining 20% This Year, Will Tripadvisor Stock Rally Further After Q1 Results?
  2. Up 26% Already This Year, What Is Next For Tripadvisor Stock?
  3. Up 21% Since 2023, How Will Tripadvisor Stock Trend Post Q4 Results?
  4. Down 18% This Year, How Will Tripadvisor Stock Trend Following Q3 Results?
  5. What’s Next For Tripadvisor Stock?
  6. Will Tripadvisor Stock See Gains Post Q2?

It is also helpful to see how its peers stack up. Check out how Tripadvisor’s Peers fare on metrics that matter. You will find other valuable comparisons for companies across industries at Peer Comparisons.

What if you’re looking for a more balanced portfolio instead? Here’s a high-quality portfolio that’s beaten the market consistently since 2016.

Returns Jun 2023
MTD [1]
YTD [1]
Total [2]
 TRIP Return 4% -10% -65%
 S&P 500 Return 4% 13% 93%
 Trefis Multi-Strategy Portfolio 5% 15% 260%

[1] Month-to-date and year-to-date as of 6/27/2023
[2] Cumulative total returns since the end of 2016

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