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Will TripAdvisor (TRIP) Disappoint Again in Q1 Earnings?

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TripAdvisor Inc. (TRIP - Free Report) is slated to report first-quarter 2017 results on May 9. Last quarter, the company reported a 72.2% negative earnings surprise.

TripAdvisor does not have a decent surprise history. The company missed estimates in each of the trailing four quarters by an average of 31.21%.

Also, in the last one year, shares of TripAdvisor underperformed the Zacks categorized Electronic Commerce industry. While the industry gained 42.3%, the stock lost 26.8%.

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

Factors to Consider

TripAdvisor’s fourth-quarter earnings missed the Zacks Consensus Estimate by a big margin. Also, revenues of $316 million decreased 24.9% sequentially and 2.3% year over year.

The decrease was due to lower display advertising and subscription revenues. Management stated that the instant booking rollout led to significant revenue headwinds in 2016, muting revenue growth, thereby impacting profitability.

Moreover, mounting expenses due to new initiatives and investments are hurting the company’s profits. Also, lack of visibility and intensifying competition from Priceline, Expedia and Alphabet continue to be growth concerns.

However, for the upcoming first-quarter, the company’s solid fundamentals, 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.

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: Both the Most Accurate estimate and the Zacks Consensus Estimate stand at 18 cents. Hence, the difference is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: TripAdvisor has a Zacks Rank #5 (Strong Sell). We caution against stocks with a Zacks Rank #4 (Sell) or 5 going into the earnings announcement, especially when the company is witnessing 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 consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:

Tyson Foods, Inc. (TSN - Free Report) , with an Earnings ESP of +3.77% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Banco de Chile (BCH - Free Report) , with an Earnings ESP of +0.74% and a Zacks Rank #2.

Global Partners LP (GLP - Free Report) , with an Earnings ESP of +233.3% and a Zacks Rank #1.

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