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What's in the Cards for TripAdvisor (TRIP) in Q1 Earnings?
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TripAdvisor, Inc. (TRIP - Free Report) is set to report first-quarter 2018 results on May 9.
Notably, the company topped the Zacks Consensus Estimate twice, while missing the same in the remaining two of the trailing four quarters, with an average negative earnings surprise of 10.44%.
In the last reported quarter, TripAdvisor reported a negative earnings surprise of 60%. Earnings of 6 cents per share declined 63% on a year-over-year basis and 84% sequentially.
Revenues of $321 million were also down 26.9% on a sequential basis but increased 1.6% year over year. The company’s year-over-year top line growth was benefited from strong growth in its non-hotel segment. However, it was adversely impacted by the sluggish performance of the hotel segment.
Coming to the price performance, shares of TripAdvisor have returned 16.6% on a year-to-date basis, underperforming the industry’s rally of 21.8%.
For the first quarter, the Zacks Consensus Estimate for revenues is pegged at $360.8 million and that for earnings is projected at 16 cents.
Let’s see how things are shaping up for this quarter.
Headwinds
The company’s growing marketing investments pose a risk. TripAdvisor’s strategy of taking out online marketing spending from its investment bucket is denting online channel growth which happens to be an important growth driver. This is likely to lower revenue generation.
Also, mounting expenses due to new initiatives and investments are hurting the company’s profits. TripAdvisor’s selling and marketing expenditure in 2017 was $849 million, which increased 12% year over year.
TripAdvisor’s Hotel segment revenues of $244 million decreased 3% from the year-ago quarter and massively 21.8% on a sequential basis. However, this happens to be the company’s main revenue contributor.
Further, tough competition from major tech companies also remains a concern for the market position of the company.
Factors to Consider
The company has revamped its website to provide travellers a site through which they can book hotels directly and not read reviews only. The move is expected to boost the company’s clicked-based advertising and transaction revenues.
TripAdvisor’s strong customer base which includes major players of travel industry like Priceline and Expedia will continue to strengthen the company’s hotel business by boosting traffic.
Moreover, regular investment in hotel segment has been helping the company in improving the user experience in regard to price comparison.
Further, with the ongoing shift from offline to online system in the market place, the non-hotel segment of the company is poised to reap benefits from the increasing demand.
Additionally, TripAdvisor’s mobile monetization initiative bode well for its increasing revenue per shopper on phone which is likely to continue in the going-to-be reported quarter as well. Also, efforts on improving the site design and to offer better products on phone will improve the shopper experience. This will improve the shopper base which will in turn aid the top-line growth.
What Our Model Says
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Sell-rated stocks (Zacks Rank #4 or 5) are best avoided. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Currently, TripAdvisor carries a Zacks Rank #5 and has an Earnings ESP of -1.89%. Therefore, per our proven model the company is unlikely to beat estimates this quarter.
Here are few stocks worth considering as our model shows that these have the right combination of elements to deliver an earnings beat in the upcoming releases.
Kemet Corp. (KEM - Free Report) has an Earnings ESP of +6.45% and a Zacks Rank #3.
NVIDIA (NVDA - Free Report) has an Earnings ESP of +0.45% and a Zacks Rank #3.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
Image: Bigstock
What's in the Cards for TripAdvisor (TRIP) in Q1 Earnings?
TripAdvisor, Inc. (TRIP - Free Report) is set to report first-quarter 2018 results on May 9.
Notably, the company topped the Zacks Consensus Estimate twice, while missing the same in the remaining two of the trailing four quarters, with an average negative earnings surprise of 10.44%.
In the last reported quarter, TripAdvisor reported a negative earnings surprise of 60%. Earnings of 6 cents per share declined 63% on a year-over-year basis and 84% sequentially.
Revenues of $321 million were also down 26.9% on a sequential basis but increased 1.6% year over year. The company’s year-over-year top line growth was benefited from strong growth in its non-hotel segment. However, it was adversely impacted by the sluggish performance of the hotel segment.
Coming to the price performance, shares of TripAdvisor have returned 16.6% on a year-to-date basis, underperforming the industry’s rally of 21.8%.
For the first quarter, the Zacks Consensus Estimate for revenues is pegged at $360.8 million and that for earnings is projected at 16 cents.
Let’s see how things are shaping up for this quarter.
Headwinds
The company’s growing marketing investments pose a risk. TripAdvisor’s strategy of taking out online marketing spending from its investment bucket is denting online channel growth which happens to be an important growth driver. This is likely to lower revenue generation.
Also, mounting expenses due to new initiatives and investments are hurting the company’s profits. TripAdvisor’s selling and marketing expenditure in 2017 was $849 million, which increased 12% year over year.
TripAdvisor’s Hotel segment revenues of $244 million decreased 3% from the year-ago quarter and massively 21.8% on a sequential basis. However, this happens to be the company’s main revenue contributor.
Further, tough competition from major tech companies also remains a concern for the market position of the company.
Factors to Consider
The company has revamped its website to provide travellers a site through which they can book hotels directly and not read reviews only. The move is expected to boost the company’s clicked-based advertising and transaction revenues.
TripAdvisor’s strong customer base which includes major players of travel industry like Priceline and Expedia will continue to strengthen the company’s hotel business by boosting traffic.
Moreover, regular investment in hotel segment has been helping the company in improving the user experience in regard to price comparison.
Further, with the ongoing shift from offline to online system in the market place, the non-hotel segment of the company is poised to reap benefits from the increasing demand.
Additionally, TripAdvisor’s mobile monetization initiative bode well for its increasing revenue per shopper on phone which is likely to continue in the going-to-be reported quarter as well. Also, efforts on improving the site design and to offer better products on phone will improve the shopper experience. This will improve the shopper base which will in turn aid the top-line growth.
What Our Model Says
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Sell-rated stocks (Zacks Rank #4 or 5) are best avoided. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Currently, TripAdvisor carries a Zacks Rank #5 and has an Earnings ESP of -1.89%. Therefore, per our proven model the company is unlikely to beat estimates this quarter.
TripAdvisor, Inc. Price and EPS Surprise
TripAdvisor, Inc. Price and EPS Surprise | TripAdvisor, Inc. Quote
Stocks That Warrant a Look
Here are few stocks worth considering as our model shows that these have the right combination of elements to deliver an earnings beat in the upcoming releases.
Analog Devices (ADI - Free Report) has an Earnings ESP of +0.20% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Kemet Corp. (KEM - Free Report) has an Earnings ESP of +6.45% and a Zacks Rank #3.
NVIDIA (NVDA - Free Report) has an Earnings ESP of +0.45% and a Zacks Rank #3.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>