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TCOM Stock Surges 81% YTD: Should You Buy Now or Wait for a Pullback?
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Shares of Trip.com Group Limited (TCOM - Free Report) have demonstrated a strong year-to-date (YTD) performance, outpacing the Zacks Leisure and Recreation Services industry. The stock has soared 81.2%, surpassing the industry's 22.6% growth. Meanwhile, the broader Zacks Consumer Discretionary sector has risen 14.4%, and the S&P 500 has rallied 26.7% in the same period.
As of Monday, the stock closed at $65.25, below its 52-week high of $69.67 but well above its 52-week low of $32.42. The TCOM stock has outperformed some other players YTD, including Carnival Corporation & plc (CCL - Free Report) , Norwegian Cruise Line Holdings Ltd. (NCLH - Free Report) and Live Nation Entertainment, Inc. (LYV - Free Report) . In the said time frame, CCL, NCLH and LYV shares have gained 40.3%, 41.5% and 47.1%, respectively.
Technical indicators suggest a continued strong performance for Trip.com. On Monday, the TCOM stock traded above its 50-day moving average of $62.66 and its 200-day moving average of $51.23. The technical strength underscores positive market sentiment and confidence in Trip.com’s financial health and prospects.
Factors Favoring TCOM Stock’s Surge
Resilient Travel Market: The company has seen resilience in the travel market, supported by a recovery in consumer confidence, and a growing demand for personalized and diverse experiences. In the third quarter of 2024, the China travel market showed strong growth in domestic and cross-border travel. The National Day holiday highlighted this trend, with travel bookings and passenger trips exceeding the pre-pandemic levels.
The Trip Best Ranking during the holiday revealed key shifts in consumer preferences, with significant growth in areas like family travel, food, culture and seasonal specialties. The younger population is increasingly focusing on travel spending, reflected in the rising demand for concerts, music festivals, exhibitions and sporting events.
Growth in Outbound Travel: TCOM continues to experience strong growth in outbound travel, driven by rising demand for regional and long-haul destinations. In the third quarter, the international flight market reached about 80% of the pre-pandemic levels, whereas outbound hotel and air ticket bookings skyrocketed to 120% from 2019. The company outperformed the industry by 40% in the same quarter.
Japan remains the leading destination for China travelers, followed by other regions in the Asia-Pacific. There is also a growing interest in long-haul destinations like Europe, the Americas, Oceania and the Middle East.
Citizens from higher-tier cities are expanding their travel reach to more distant locations. At the same time, travelers from lower-tier towns are beginning to venture abroad, creating a growth driver for outbound travel. During the National Day holiday, travel bookings from Tier 4 and 5 cities skyrocketed 100% and 300%, respectively.
Technological Advancements: Trip.com invests significantly in technology and AI to support its operations. By integrating AI into its services, TCOM aims to provide smarter, more personalized options for travelers. AI is enhancing user experience by recommending products tailored to individual travel habits, making the process smoother and more efficient. Additionally, AI is reducing coding time for engineers by 15-30%, improving productivity.
TCOM leverages AI to elevate customer service, ensuring high-quality support. AI is also improving the accuracy and efficiency of content generation, such as videos and images. The company plans to continue utilizing AI to drive operational efficiency and enhance the overall user experience.
Driving Innovation & Collaboration: Trip.com is committed to driving innovation by working closely with partners to enhance product offerings. The company focuses on developing hotel-packaged deals to address emerging customer needs and explore various use cases. TCOM aims to strengthen customer loyalty and deliver increased value through co-branding and mutual membership initiatives.
Additionally, TCOM supports domestic hotels in increasing visibility among inbound travelers and boosting demand from international markets. With its global network, the company helps suppliers reach domestic and global audiences through integrated marketing efforts. In the third quarter, Trip.com’s international businesses saw strong momentum, with air ticket and hotel bookings rising more than 60% year over year and bookings from the APAC region surging above 70%.
Estimate Revision Favors Trip.com
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for TCOM’s 2024 earnings has trended upward in the past 30 days. The estimated figure indicates growth of 35.4% from that reported a year ago. The consensus estimate for 2025 earnings has moved up over said time frame, implying 7.3% year-over-year growth.
Trip.com’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average earnings surprise being 42.8%.
TCOM Stock Trades at a Premium
As Trip.com has outperformed the industry YTD, its valuation looks a bit stretched compared with the industry average. TCOM is currently valued at a premium compared with its industry on a forward 12-month P/S basis. The company’s forward 12-month price-to-sales ratio stands at 5.05X, higher than the industry’s average of 2.40X.
How to Play TCOM Stock?
Trip.com is well-positioned for continued success, driven by a resilient travel market, strong growth in outbound travel and technological investments. Its focus on innovation, collaboration with partners and expanding global presence enhance its competitive advantage.
With strong upward momentum in its stock price and improving earnings estimates, TCOM offers an attractive opportunity for investors looking to capitalize on the booming travel and tourism sector. The company sports a Zacks Rank #1 (Strong Buy) at present.
Image: Shutterstock
TCOM Stock Surges 81% YTD: Should You Buy Now or Wait for a Pullback?
Shares of Trip.com Group Limited (TCOM - Free Report) have demonstrated a strong year-to-date (YTD) performance, outpacing the Zacks Leisure and Recreation Services industry. The stock has soared 81.2%, surpassing the industry's 22.6% growth. Meanwhile, the broader Zacks Consumer Discretionary sector has risen 14.4%, and the S&P 500 has rallied 26.7% in the same period.
As of Monday, the stock closed at $65.25, below its 52-week high of $69.67 but well above its 52-week low of $32.42. The TCOM stock has outperformed some other players YTD, including Carnival Corporation & plc (CCL - Free Report) , Norwegian Cruise Line Holdings Ltd. (NCLH - Free Report) and Live Nation Entertainment, Inc. (LYV - Free Report) . In the said time frame, CCL, NCLH and LYV shares have gained 40.3%, 41.5% and 47.1%, respectively.
TCOM Stock’s YTD Price Performance
Image Source: Zacks Investment Research
TCOM Stock Trades Above 50 & 200-Day Moving Averages
Image Source: Zacks Investment Research
Technical indicators suggest a continued strong performance for Trip.com. On Monday, the TCOM stock traded above its 50-day moving average of $62.66 and its 200-day moving average of $51.23. The technical strength underscores positive market sentiment and confidence in Trip.com’s financial health and prospects.
Factors Favoring TCOM Stock’s Surge
Resilient Travel Market: The company has seen resilience in the travel market, supported by a recovery in consumer confidence, and a growing demand for personalized and diverse experiences. In the third quarter of 2024, the China travel market showed strong growth in domestic and cross-border travel. The National Day holiday highlighted this trend, with travel bookings and passenger trips exceeding the pre-pandemic levels.
The Trip Best Ranking during the holiday revealed key shifts in consumer preferences, with significant growth in areas like family travel, food, culture and seasonal specialties. The younger population is increasingly focusing on travel spending, reflected in the rising demand for concerts, music festivals, exhibitions and sporting events.
Growth in Outbound Travel: TCOM continues to experience strong growth in outbound travel, driven by rising demand for regional and long-haul destinations. In the third quarter, the international flight market reached about 80% of the pre-pandemic levels, whereas outbound hotel and air ticket bookings skyrocketed to 120% from 2019. The company outperformed the industry by 40% in the same quarter.
Japan remains the leading destination for China travelers, followed by other regions in the Asia-Pacific. There is also a growing interest in long-haul destinations like Europe, the Americas, Oceania and the Middle East.
Citizens from higher-tier cities are expanding their travel reach to more distant locations. At the same time, travelers from lower-tier towns are beginning to venture abroad, creating a growth driver for outbound travel. During the National Day holiday, travel bookings from Tier 4 and 5 cities skyrocketed 100% and 300%, respectively.
Technological Advancements: Trip.com invests significantly in technology and AI to support its operations. By integrating AI into its services, TCOM aims to provide smarter, more personalized options for travelers. AI is enhancing user experience by recommending products tailored to individual travel habits, making the process smoother and more efficient. Additionally, AI is reducing coding time for engineers by 15-30%, improving productivity.
TCOM leverages AI to elevate customer service, ensuring high-quality support. AI is also improving the accuracy and efficiency of content generation, such as videos and images. The company plans to continue utilizing AI to drive operational efficiency and enhance the overall user experience.
Driving Innovation & Collaboration: Trip.com is committed to driving innovation by working closely with partners to enhance product offerings. The company focuses on developing hotel-packaged deals to address emerging customer needs and explore various use cases. TCOM aims to strengthen customer loyalty and deliver increased value through co-branding and mutual membership initiatives.
Additionally, TCOM supports domestic hotels in increasing visibility among inbound travelers and boosting demand from international markets. With its global network, the company helps suppliers reach domestic and global audiences through integrated marketing efforts. In the third quarter, Trip.com’s international businesses saw strong momentum, with air ticket and hotel bookings rising more than 60% year over year and bookings from the APAC region surging above 70%.
Estimate Revision Favors Trip.com
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for TCOM’s 2024 earnings has trended upward in the past 30 days. The estimated figure indicates growth of 35.4% from that reported a year ago. The consensus estimate for 2025 earnings has moved up over said time frame, implying 7.3% year-over-year growth.
Trip.com’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average earnings surprise being 42.8%.
TCOM Stock Trades at a Premium
As Trip.com has outperformed the industry YTD, its valuation looks a bit stretched compared with the industry average. TCOM is currently valued at a premium compared with its industry on a forward 12-month P/S basis. The company’s forward 12-month price-to-sales ratio stands at 5.05X, higher than the industry’s average of 2.40X.
How to Play TCOM Stock?
Trip.com is well-positioned for continued success, driven by a resilient travel market, strong growth in outbound travel and technological investments. Its focus on innovation, collaboration with partners and expanding global presence enhance its competitive advantage.
With strong upward momentum in its stock price and improving earnings estimates, TCOM offers an attractive opportunity for investors looking to capitalize on the booming travel and tourism sector. The company sports a Zacks Rank #1 (Strong Buy) at present.
You can see the complete list of today’s Zacks #1 Rank stocks here.