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Bear of the Day: TripAdvisor (TRIP)

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It has been an extremely difficult period for companies in the travel market. Concerns over Zika and terrorism are making those that would otherwise travel stay home, hitting a number of companies in the airline, hotel, and cruise markets.

But another area that has also been impacted is the online travel review market, with companies like TripAdvisor ( (TRIP - Free Report) being prime examples. After all, why would you review things—or look at reviews—for a trip that you aren’t going to make anytime soon?

Don’t believe me? Well, take a look at how TRIP has done in its recent earnings reports as a guide.

TRIP earnings

For both of TRIP’s most recent earnings reports the company missed earnings estimates. The company saw a 40% miss two quarters ago, and it followed it up with a 9.6% miss in the most recently completed quarter.

Investors sold off the stock as a result, and shares of TRIP are approaching 2016 lows as a result of these recent sell-offs. And with some of the recent earnings estimate revisions, it is hard to have an optimistic look on TRIP stock these days, suggesting TRIP may test those 2016 lows before long.

Recent Estimates

Following the most recent miss for TRIP, analysts have been racing to downgrade their expectations for the stock in both the near term and the long term. Who can blame these analysts given the rough overall travel environment, and the fact that TRIP has had great difficulty in living up to earnings expectations?

It is also worth noting that analysts haven’t just been giving a slight reduction in estimates lately, as shares have seen nearly double digit percentage Consensus estimate reductions for the current quarter, while the full year has seen a 10.2% reduction in the Consensus.

TRIPADVISOR INC Price, Consensus and EPS Surprise

TRIPADVISOR INC Price, Consensus and EPS Surprise | TRIPADVISOR INC Quote

With these kinds of metrics, it shouldn’t be surprising to note that TRIP has a Zacks Rank #5 (Strong Sell) and that it is currently ranked in the bottom five percent of all stocks from this important look. And with a VGM score of ‘F’ (thanks to a grade of ‘F’ in Value) there is little to like about this stock right now, and especially in today’s environment.

Other Choices

TRIP is clearly a name to avoid right now, though there are few better choices in this corner of the travel world. (EXPE - Free Report) and PCLN at least have ranks of ‘hold’ but that isn’t that much better.

Instead, it may pay to look to leisure and recreation stocks instead, as there are a few gems in this corner of the investing world. In particular, we see strength in both Marine Products (MPX - Free Report) and Pool Corp ( (POOL - Free Report) which both have Zacks Rank #2 (Buy) ratings. Plus, since both just came out of hold territory and are less impacted by broad Zika or terrorism woes, they could be better consumer choices in today’s uncertain world, and most likely better than TRIP in the near term too.

For more on stocks to avoid and how to bet on companies to go down further, make sure to listen to our podcast below on ‘How to Short Stocks’.

More Stocks to Sell. Now.

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