It has been about a month since the last earnings report for TripAdvisor (
TRIP Quick Quote TRIP - Free Report) . Shares have added about 56.1% 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 Q4 Loss Wider Than Expected, Sales Top
TripAdvisor Inc. reported adjusted fourth-quarter 2020 loss of 41 cents per share, wider than the Zacks Consensus Estimate of a loss of 26 cents. It reported earnings of 38 cents per share in the year-ago quarter.
Revenues for the fourth quarter were $116 million, surpassing the Zacks Consensus Estimate by 12.5%. However, the top line was down 65% year over year. For October, November, and December, monthly unique users on Tripadvisor sites were approximately 68%, 58%, and 59%, respectively. Revenue Segments
TripAdvisor reports revenues in three segments: Hotels, Media & Platform, Experiences & Dining, and Other.
Revenues of $74 million (accounting for 64% of total revenues) from the Hotels, Media & Platform segment were down 62% from the year-ago quarter. Revenues of $36 million from the Experiences & Dining segment, which accounted for 31% of total revenues, were also down 67% year over year. The Other segment contributed the remaining 5% to total revenues. This segment includes revenues from rentals, SmarterTravel, Flights/Cruise and TripAdvisor China. Revenues from this segment were $6 million, down 81% from the year-ago quarter. Operating Results
TripAdvisor’s operating expenses (selling & marketing, technology & content, and general & administrative) of $165 million were down 35.8% from $257 million a year ago. Operating loss was $92 million for the fourth quarter versus operating profit of 23 million in the year-ago period.
On a GAAP basis, the company recorded net loss of $55 million or loss of 41 cents per share versus net income of $53 million or earnings of 38 cents in the prior-year quarter. Balance Sheet & Cash Flow
TripAdvisor exited the quarter with cash and cash equivalents of roughly $418 million, down from $446 million recorded in the third quarter.
Accounts receivables were $83 million, down from $91 million in the third quarter. As of Dec 31, 2020, the company had a long-term debt of $491 million.
Cash flow from operations was ($15) million versus ($31) million in the third quarter. Capex was $9 million versus $15 million in the third quarter. Free cash flow was ($24) million versus ($42) million in the third quarter.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision. The consensus estimate has shifted -68.18% due to these changes.
At this time, TripAdvisor has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. 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. Notably, TripAdvisor has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.