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TripAdvisor (TRIP) Down 5.9% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for TripAdvisor (TRIP - Free Report) . Shares have lost about 5.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is TripAdvisor due for a breakout? 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 reported non-GAAP second-quarter 2023 earnings of 34 cents per share, missing the Zacks Consensus Estimate by 8.1%. The bottom line was down 8% year over year.
Revenues of $494 million surged 18% year over year and surpassed the Zacks Consensus Estimate of $474 million.
Top-line growth was driven by growing demand for travel industry-related services. Further, strong momentum across Viator contributed well to the top line.
Further, a well-performing TheFork segment benefited the company.
Quarterly Details
TripAdvisor reports revenues under three segments: Tripadvisor Core, Viator and TheFork.
Tripadvisor Core: Revenues summed $279 million (accounting for 56.5% of revenues), up 2% year over year. The figure came below the consensus mark of $286 million. Tripadvisor-branded display and platform revenues jumped 14% year over year to $42 million. Revenues from Tripadvisor experiences and dining were $50 million, increasing by 43% year over year.
However, revenues from Tripadvisor-branded hotels decreased 7% from the prior-year quarter’s level to $174 million. Other revenues consisting of rentals, flights, cars and cruise revenues were $13 million, down 7% year over year.
Viator: Revenues totaled $216 million (43.7% of the top line). The figure was up 59% from the year-ago quarter’s level. The figure surpassed the Zacks Consensus Estimate of $180 million.
TheFork: Revenues came in at $38 million (7.7% of revenues), increasing 19% year over year. The figure lagged the consensus mark of $38.3 million.
Operating Results
TripAdvisor’s selling and marketing costs increased 24% year over year to $270 million.
General and administrative costs were up 68% from the year-ago quarter’s level to $47 million. Technology and content costs of $71 million increased 34% on a year-over-year basis.
TRIP reported an operating margin that contracted 620 basis points (bps) year over year to 8.9% in the second quarter.
In the reported quarter, the total adjusted EBITDA margin was 18%, which contracted 810 bps on a year-over-year basis.
Balance Sheet & Cash Flow
As of Jun 30, 2023, cash and cash equivalents were $1.14 billion compared with $1.13 billion as of Mar 31, 2023.
Long-term debt stood at $838 million at the end of the second quarter compared with $837 million at the end of the previous quarter.
Cash generated from operations was $105 million in the reported quarter, down from $135 million in the prior quarter.
Additionally, free cash flow was $90 million in the second 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 -25.23% due to these changes.
VGM Scores
Currently, TripAdvisor has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top 20% 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 is part of the Zacks Internet - Commerce industry. Over the past month, eBay (EBAY - Free Report) , a stock from the same industry, has gained 2.7%. The company reported its results for the quarter ended June 2023 more than a month ago.
eBay reported revenues of $2.54 billion in the last reported quarter, representing a year-over-year change of +4.9%. EPS of $1.03 for the same period compares with $0.99 a year ago.
For the current quarter, eBay is expected to post earnings of $1.01 per share, indicating a change of +1% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
eBay has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.
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TripAdvisor (TRIP) Down 5.9% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for TripAdvisor (TRIP - Free Report) . Shares have lost about 5.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is TripAdvisor due for a breakout? 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 Q2 Earnings Miss, Revenues Beat Estimates
TripAdvisor reported non-GAAP second-quarter 2023 earnings of 34 cents per share, missing the Zacks Consensus Estimate by 8.1%. The bottom line was down 8% year over year.
Revenues of $494 million surged 18% year over year and surpassed the Zacks Consensus Estimate of $474 million.
Top-line growth was driven by growing demand for travel industry-related services. Further, strong momentum across Viator contributed well to the top line.
Further, a well-performing TheFork segment benefited the company.
Quarterly Details
TripAdvisor reports revenues under three segments: Tripadvisor Core, Viator and TheFork.
Tripadvisor Core: Revenues summed $279 million (accounting for 56.5% of revenues), up 2% year over year. The figure came below the consensus mark of $286 million. Tripadvisor-branded display and platform revenues jumped 14% year over year to $42 million. Revenues from Tripadvisor experiences and dining were $50 million, increasing by 43% year over year.
However, revenues from Tripadvisor-branded hotels decreased 7% from the prior-year quarter’s level to $174 million. Other revenues consisting of rentals, flights, cars and cruise revenues were $13 million, down 7% year over year.
Viator: Revenues totaled $216 million (43.7% of the top line). The figure was up 59% from the year-ago quarter’s level. The figure surpassed the Zacks Consensus Estimate of $180 million.
TheFork: Revenues came in at $38 million (7.7% of revenues), increasing 19% year over year. The figure lagged the consensus mark of $38.3 million.
Operating Results
TripAdvisor’s selling and marketing costs increased 24% year over year to $270 million.
General and administrative costs were up 68% from the year-ago quarter’s level to $47 million. Technology and content costs of $71 million increased 34% on a year-over-year basis.
TRIP reported an operating margin that contracted 620 basis points (bps) year over year to 8.9% in the second quarter.
In the reported quarter, the total adjusted EBITDA margin was 18%, which contracted 810 bps on a year-over-year basis.
Balance Sheet & Cash Flow
As of Jun 30, 2023, cash and cash equivalents were $1.14 billion compared with $1.13 billion as of Mar 31, 2023.
Long-term debt stood at $838 million at the end of the second quarter compared with $837 million at the end of the previous quarter.
Cash generated from operations was $105 million in the reported quarter, down from $135 million in the prior quarter.
Additionally, free cash flow was $90 million in the second 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 -25.23% due to these changes.
VGM Scores
Currently, TripAdvisor has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top 20% 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 is part of the Zacks Internet - Commerce industry. Over the past month, eBay (EBAY - Free Report) , a stock from the same industry, has gained 2.7%. The company reported its results for the quarter ended June 2023 more than a month ago.
eBay reported revenues of $2.54 billion in the last reported quarter, representing a year-over-year change of +4.9%. EPS of $1.03 for the same period compares with $0.99 a year ago.
For the current quarter, eBay is expected to post earnings of $1.01 per share, indicating a change of +1% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
eBay has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.