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Analyst Blog

TripAdvisor Inc. (TRIP - Free Report) is slated to report third-quarter 2016 results on Nov 8. Last quarter, the company reported a 9.68% negative earnings surprise.

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

Factors to Consider

TripAdvisor’s second-quarter earnings missed the Zacks Consensus Estimate due to higher-than-expected operating expenses. Revenues of $391.0 million were up 26.5% sequentially but down 3.5% year over year due to lower click-based advertising sales.

For the third quarter, the company’s solid fundamentals, various growth initiatives including Instant Booking, strong focus on developing mobile products, expansion into international restaurant reservation and improvement in user growth and engagement, especially on mobile devices, will be the likely drivers.

Nevertheless, intensifying competition from Priceline (PCLN - Free Report) , Expedia and Alphabet may act as a dampener.

Earnings Whispers

Our proven model does not conclusively show that TripAdvisor will beat earnings estimates this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.

Zacks ESP: The Most Accurate estimate stands at 43 cents, while the Zacks Consensus Estimate is pegged at 42 cents. Hence, the difference is +2.38%.This is a meaningful indication of a likely positive earnings surprise. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.

Zacks Rank: TripAdvisor has a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

TRIPADVISOR INC Price and EPS Surprise

 

TRIPADVISOR INC Price and EPS Surprise | TRIPADVISOR INC Quote

Stocks to Consider

Here are some stocks, which you may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:

Glaukos Corporation (GKOS - Free Report) is slated to report third-quarter earnings results on Nov 10. It has an Earnings ESP of +100.0% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Lumos Networks Corp. (LMOS - Free Report) with an Earnings ESP of +150.0% and a Zacks Rank #3. The company is slated to report third-quarter earnings results on Nov 9.

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