It has been about a month since the last earnings report for TripAdvisor (TRIP - Free Report) . Shares have added about 4.8% in that time frame, outperforming 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 the most recent earnings report in order to get a better handle on the important catalysts.
TripAdvisor Q2 Loss Wider Than Expected, Revenues Top
TripAdvisor Inc. reported adjusted second-quarter 2020 loss of 76 cents per share, wider than the Zacks Consensus Estimate of a loss of 71 cents. Earnings of 45 cents per share were reported in the year-ago quarter.
Revenues for the second quarter were $59 million, surpassing the Zacks Consensus Estimate by 21.8%. However, the top line was down 86% year over year.
In April, May, and June, monthly unique users on Tripadvisor sites were approximately 33%, 45%, and 60%, respectively.
Starting first-quarter 2019, TripAdvisor revised the reporting structure into three segments: Hotels, Media & Platform, Experiences & Dining, and Other.
Revenues of $38 million (accounting for 64% of total revenues) from the Hotels, Media & Platform segment were down 85% from the year-ago quarter.
Revenues of $14 million from the Experiences & Dining segment, which accounted for 24% of total revenues, were also down 89% year over year.
The Other segment contributed the remaining 12% to total revenues. This segment includes revenues from rentals, SmarterTravel, Flights/Cruise and TripAdvisor China. Revenues from this segment were $7 million, down 84% from the year-ago quarter.
TripAdvisor’s adjusted operating expenses of $148 million were down 50.5% from $299 million a year ago. Operating loss was $164 million for the second quarter versus operating profit of 66 million in the year-ago period.
On a GAAP basis, the company recorded net loss of $153 million or loss of $1.14 per share versus net income of $34 million or earnings of 24 cents in the prior-year quarter.
Balance Sheet & Cash Flow
TripAdvisor exited the quarter with cash, cash equivalents and short-term investments of roughly $698 million, down from $798 million recorded in the first quarter.
Accounts receivables were $74 million, down from $159 million in the first quarter.
As of Jun 30, 2020, the company had a long-term debt of $700 million.
Cash flow from operations was ($78) million versus ($70) million in the first quarter. Capex was $15 million, down from $20 million in the first quarter. Free cash flow was ($93) million versus ($90) million in the first quarter.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month. The consensus estimate has shifted -27.71% due to these changes.
At this time, TripAdvisor has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise TripAdvisor has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.