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TripAdvisor (TRIP) Down 0.6% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for TripAdvisor (TRIP - Free Report) . Shares have lost about 0.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is TripAdvisor due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
TripAdvisor Q3 Earnings & Revenues Beat, Rise Y/Y
TripAdvisor reported non-GAAP third-quarter 2023 earnings of 52 cents per share, beating the Zacks Consensus Estimate by 8.3%. The bottom line was up 37% year over year.
Revenues of $533 million surged 16% year over year and surpassed the Zacks Consensus Estimate of $506 million.
Top-line growth was driven by growing demand for travel industry-related services. Strong momentum across Viator contributed well to the top line.
A well-performing TheFork segment benefited the company.
However, weakness in hotel meta offerings, primarily due to sluggishness in Europe, was a concern.
Quarterly Details
TripAdvisor reports revenues under three segments: Tripadvisor Core, Viator and TheFork.
Tripadvisor Core: Revenues summed $290 million (accounting for 54.4% of revenues), up 2% year over year. The figure came above the consensus mark of $278 million. Tripadvisor-branded display and platform revenues jumped 15% year over year to $38 million. Revenues from Tripadvisor experiences and dining were $55 million, increasing by 22% year over year.
However, revenues from Tripadvisor-branded hotels decreased 4% from the prior-year quarter’s level to $181 million. Other revenues consisting of rentals, flights, cars and cruise revenues were $16 million, down 11% year over year.
Viator: Revenues totaled $245 million (46% of the top line). The figure increased by 41% from the year-ago quarter’s level and surpassed the Zacks Consensus Estimate of $229 million.
TheFork: Revenues came in at $42 million (7.9% of revenues), increasing 20% year over year. The figure came slightly below the consensus mark of $42.05 million.
Operating Results
TripAdvisor’s selling and marketing costs increased 16% year over year to $272 million.
General and administrative costs were up 9% from the year-ago quarter’s level to $49 million.
Technology and content costs of $66 million increased by 20% on a year-over-year basis.
TRIP reported an operating margin that contracted 320 basis points (bps) year over year to 12% in the third quarter.
In the reported quarter, the total adjusted EBITDA margin was 23.8%, which contracted 130 bps on a year-over-year basis.
Balance Sheet & Cash Flow
As of Sep 30, 2023, cash and cash equivalents were $1.12 billion compared with $1.14 billion as of Jun 30, 2023.
Long-term debt stood at $839 million at the end of the third quarter compared with $838 million at the end of the previous quarter.
Cash generated from operations was $14 million in the reported quarter, significantly down from $105 million in the prior quarter.
Free cash flow was an outflow of $2 million in the third quarter.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted 6.77% due to these changes.
VGM Scores
Currently, TripAdvisor has a nice Growth Score of B, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions has been net zero. Notably, TripAdvisor has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
TripAdvisor belongs to the Zacks Internet - Commerce industry. Another stock from the same industry, Wayfair (W - Free Report) , has gained 20.1% over the past month. More than a month has passed since the company reported results for the quarter ended September 2023.
Wayfair reported revenues of $2.94 billion in the last reported quarter, representing a year-over-year change of +3.7%. EPS of -$0.13 for the same period compares with -$2.11 a year ago.
Wayfair is expected to post a loss of $0.21 per share for the current quarter, representing a year-over-year change of +87.7%. Over the last 30 days, the Zacks Consensus Estimate has changed +2.8%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for Wayfair. Also, the stock has a VGM Score of C.
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TripAdvisor (TRIP) Down 0.6% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for TripAdvisor (TRIP - Free Report) . Shares have lost about 0.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is TripAdvisor due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
TripAdvisor Q3 Earnings & Revenues Beat, Rise Y/Y
TripAdvisor reported non-GAAP third-quarter 2023 earnings of 52 cents per share, beating the Zacks Consensus Estimate by 8.3%. The bottom line was up 37% year over year.
Revenues of $533 million surged 16% year over year and surpassed the Zacks Consensus Estimate of $506 million.
Top-line growth was driven by growing demand for travel industry-related services. Strong momentum across Viator contributed well to the top line.
A well-performing TheFork segment benefited the company.
However, weakness in hotel meta offerings, primarily due to sluggishness in Europe, was a concern.
Quarterly Details
TripAdvisor reports revenues under three segments: Tripadvisor Core, Viator and TheFork.
Tripadvisor Core: Revenues summed $290 million (accounting for 54.4% of revenues), up 2% year over year. The figure came above the consensus mark of $278 million. Tripadvisor-branded display and platform revenues jumped 15% year over year to $38 million. Revenues from Tripadvisor experiences and dining were $55 million, increasing by 22% year over year.
However, revenues from Tripadvisor-branded hotels decreased 4% from the prior-year quarter’s level to $181 million. Other revenues consisting of rentals, flights, cars and cruise revenues were $16 million, down 11% year over year.
Viator: Revenues totaled $245 million (46% of the top line). The figure increased by 41% from the year-ago quarter’s level and surpassed the Zacks Consensus Estimate of $229 million.
TheFork: Revenues came in at $42 million (7.9% of revenues), increasing 20% year over year. The figure came slightly below the consensus mark of $42.05 million.
Operating Results
TripAdvisor’s selling and marketing costs increased 16% year over year to $272 million.
General and administrative costs were up 9% from the year-ago quarter’s level to $49 million.
Technology and content costs of $66 million increased by 20% on a year-over-year basis.
TRIP reported an operating margin that contracted 320 basis points (bps) year over year to 12% in the third quarter.
In the reported quarter, the total adjusted EBITDA margin was 23.8%, which contracted 130 bps on a year-over-year basis.
Balance Sheet & Cash Flow
As of Sep 30, 2023, cash and cash equivalents were $1.12 billion compared with $1.14 billion as of Jun 30, 2023.
Long-term debt stood at $839 million at the end of the third quarter compared with $838 million at the end of the previous quarter.
Cash generated from operations was $14 million in the reported quarter, significantly down from $105 million in the prior quarter.
Free cash flow was an outflow of $2 million in the third quarter.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted 6.77% due to these changes.
VGM Scores
Currently, TripAdvisor has a nice Growth Score of B, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions has been net zero. Notably, TripAdvisor has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
TripAdvisor belongs to the Zacks Internet - Commerce industry. Another stock from the same industry, Wayfair (W - Free Report) , has gained 20.1% over the past month. More than a month has passed since the company reported results for the quarter ended September 2023.
Wayfair reported revenues of $2.94 billion in the last reported quarter, representing a year-over-year change of +3.7%. EPS of -$0.13 for the same period compares with -$2.11 a year ago.
Wayfair is expected to post a loss of $0.21 per share for the current quarter, representing a year-over-year change of +87.7%. Over the last 30 days, the Zacks Consensus Estimate has changed +2.8%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for Wayfair. Also, the stock has a VGM Score of C.