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TripAdvisor (TRIP) to Report Q3 Earnings: What's in Store?

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TripAdvisor, Inc. (TRIP - Free Report) is expected to report third-quarter 2018 results on Nov 8.

Notably, the company topped the Zacks Consensus Estimate in three of the trailing four quarters while missed the same only once, recording an average positive earnings surprise of 9.63%.

In the last reported quarter, TripAdvisor’s earnings of 41 cents per share surpassed the Zacks Consensus Estimate by 2 cents. The figure also increased 37% sequentially and 8% from the year-ago quarter.

Revenues of $433 million were also up 14.6% on a sequential basis and 2.1% year over year. However, the figure lagged the Zacks Consensus Estimate of $436.1 million.

The company’s top line benefited from strong growth in its non-hotel segment and accelerated number of average monthly unique visitors.

Coming to price performance, shares of TripAdvisor have returned 55.7% on a year-to-date basis, outperforming the industry’s growth of 2.5%.

 

 

For the third quarter, the Zacks Consensus Estimate for revenues is pegged at $469.2 million.

Let’s see how things are shaping up for this announcement.

Non-Hotel Segment to Drive Growth

TripAdvisor is currently riding on strong performance of non-hotel business over the past few quarters. This segment includes revenues from attractions, restaurants and vacation rental businesses.

In the last reported quarter, the segment generated $120 million of revenues, exhibiting year-over-year growth of 22%.

We believe, with the ongoing shift from offline to online system in the market place, the non-hotel segment of the company is likely to drive the top line in the to-be-reported quarter.

Moreover, the company’s expansion into the international restaurant reservation space will continue to aid in revenue generation at this particular segment.

Other Factors to Consider

TripAdvisor’s strong efforts toward improving user base will continue to aid market share growth.

The company’s Instant Booking initiative that allows travelers to book a hotel through the booking partners on its mobile site or apps bodes well for the expansion of user base.

Further, the expansion of its mobile product portfolio on a constant basis is likely to aid growth of its Mobile platform in the to-be-reported quarter.

However, the company's Hotel business is not doing very well over the past few quarters. In the last reported quarter, revenues of $313 million from the Hotel segment decreased 4% from the year-ago quarter.

Increasing marketing investments continue to be a concern. Further, tough competition from major tech companies remains a woe.

What Our Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Sell-rated stocks (Zacks Rank #4 or 5) are best avoided. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Currently, TripAdvisor has a Zacks Rank #3 and an Earnings ESP of +0.25%, which indicates a likely positive surprise.

TripAdvisor, Inc. Price and EPS Surprise

 

TripAdvisor, Inc. Price and EPS Surprise | TripAdvisor, Inc. Quote

Other Stocks That Warrant a Look

Here are a few other stocks worth considering as our model shows that these also have the right combination of elements to deliver an earnings beat in the upcoming releases.

AMETEK (AME - Free Report) has an Earnings ESP of +1.69% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Adobe Systems Incorporated (ADBE - Free Report) has an Earnings ESP of +0.19% and a Zacks Rank #2.

CenturyLink, Inc. has an Earnings ESP of +10.29% and holds a Zacks Rank #2.

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