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Why Is TripAdvisor (TRIP) Up 0.8% Since Last Earnings Report?

A month has gone by since the last earnings report for TripAdvisor (TRIP). Shares have added about 0.8% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is TripAdvisor due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

TripAdvisor Q1 Earnings & Revenues Beat, Rise Y/Y

TripAdvisor reported non-GAAP first-quarter 2024 earnings of 12 cents per share, which significantly jumped from the prior-year quarter’s 5 cents. The figure also beat the Zacks Consensus Estimate, which was pegged at break even.

Revenues of $395 million increased 6% year over year and surpassed the Zacks Consensus Estimate of $390.9 million.

Top-line growth was driven by the strong momentum in the Viator segment. A well-performing TheFork segment also benefited the company.

However, softness across Tripadvisor-branded hotels was concerning.

Quarterly Details

TripAdvisor reports revenues under three segments: Brand Tripadvisor, Viator and TheFork.

Brand Tripadvisor: Revenues summed $240 million (accounting for 60.8% of the total revenues), down 2% year over year. The figure lagged the consensus mark of $244 million. Media and advertising revenues jumped 10% year over year to $33 million. Revenues from experiences and dining were $36 million, increasing 9% year over year.

However, revenues from branded hotels decreased 5% year over year to $159 million. Other revenues within the segment were $12 million, which declined 8% year over year.

Viator: Revenues totaled $141 million (35.7%). The figure increased 23% year over year and surpassed the Zacks Consensus Estimate of $135 million.

TheFork: Revenues came in at $41 million (10.4%), increasing 17% year over year. The figure beat the consensus mark of $38.9 million.

Operating Results

TripAdvisor’s selling and marketing costs increased 1% year over year to $221 million. As a percentage of revenues, the figure contracted 300 basis points (bps) year over year.

General and administrative costs were up 17% from the year-ago quarter to $56 million. As a percentage of revenues, the figure expanded 100 bps year over year.

Technology and content costs of $76 million increased 12% on a year-over-year basis. As a percentage of revenues, the figure rose 100 bps year over year.

TRIP reported an operating loss of $15 million in the quarter under review, which was wider than the loss of $14 million in the year-ago quarter.

In the reported quarter, the total adjusted EBITDA margin was 12%, which expanded 300 bps on a year-over-year basis.

Balance Sheet & Cash Flow

As of Mar 31, 2024, cash and cash equivalents were $1.17 billion compared with $1.07 billion as of Dec 31, 2023.

The long-term debt stood at $840 million at the end of the first quarter compared with the previous quarter’s $839 million.

Tripadvisor generated $139 million of cash from operations in the reported quarter against $19 million of cash used in operations in the prior quarter.

The free cash flow was $123 million in the first quarter.

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How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates.

The consensus estimate has shifted -43.28% due to these changes.

VGM Scores

At this time, TripAdvisor has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile 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 indicates a downward shift. Notably, TripAdvisor has a Zacks Rank #3 (Hold). We expect an in-line 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, Match Group (MTCH), has gained 6.9% over the past month. More than a month has passed since the company reported results for the quarter ended March 2024.

Match Group reported revenues of $859.65 million in the last reported quarter, representing a year-over-year change of +9.2%. EPS of $0.44 for the same period compares with $0.42 a year ago.

For the current quarter, Match Group is expected to post earnings of $0.48 per share, indicating no change from the year-ago quarter. The Zacks Consensus Estimate has changed -7.8% over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Match Group. Also, the stock has a VGM Score of A.

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TripAdvisor, Inc. (TRIP) : Free Stock Analysis Report

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