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TripAdvisor (TRIP) to Report Q2 Earnings: What's in Store?

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TripAdvisor, Inc. (TRIP - Free Report) is set to report second-quarter 2018 results on Aug 1.

Notably, the company topped the Zacks Consensus Estimate in three of the trailing four quarters while missing the same once, recording an average positive earnings surprise of 15.01%.

In the last reported quarter, TripAdvisor’s earnings of 9 cents per share surpassed the Zacks Consensus Estimate of 5 cents. The figure increased 50% sequentially but declined 44% on a year-over-year basis.

Revenues of $378 million were also up 17.8% on a sequential basis and 1.6% year over year. The figure also came ahead of the Zacks Consensus Estimate of $361 million.

The company’s year-over-year top-line growth benefited from strong growth in its non-hotel segment and accelerated number of average monthly unique visitors.

Coming to the price performance, shares of TripAdvisor have returned 68.1% on a year-to-date basis, underperforming the industry’s rally of 30.8%.

For the second quarter, the Zacks Consensus Estimate for revenues is pegged at $436.1 million.

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

Non-Hotel Segment to Drive Growth

TripAdvisor is currently riding on the strong performance of its non-hotel business over the past few quarters. This segment includes revenues from attractions, restaurants and vacation rental businesses.

In the last reported quarter, the segment exhibited year-over-year growth of 37% and generated $79 million of revenues.

We believe with the ongoing shift from offline to online system in the market place, the non-hotel segment of the company is likely to drive its top-line in the to-be reported quarter.

Moreover, the company’s expansion into the international restaurant reservation space will continue to aid the revenue generation in this particular segment.

Additionally, the company’s focus on food delivery space is a big positive. In the second quarter, the company added another food-delivery service,, to its offerings in order to incorporate food-ordering service into its restaurant listings.

The tie-up will aid travelers order meals from restaurants directly from TripAdvisor's desktop or mobile platform. The recent deal will help TripAdvisor further expand its user base.

Moreover, the company acquired Bokun during the second quarter in order to modify its experience division. The buyout has allowed the company to provide technical solutions to suppliers. This will enhance the tour and travel experience of the customers.

TripAdvisor, Inc. Price and EPS Surprise

TripAdvisor, Inc. Price and EPS Surprise | TripAdvisor, Inc. Quote

Other Factors to Consider

TripAdvisor’s strong efforts toward improving user base will continue to aid its market share growth.

The company’s Instant Booking initiative that allows travelers to book a hotel through the booking partners on its mobile site or apps bodes well for the expansion of its user base.

Further, expansion of its mobile product portfolio on a constant basis is likely to aid growth of its Mobile platform in the to-be-reported quarter.

However, the company's Hotel business is not doing very well over the past few quarters. In the last reported quarter, revenues of $299 million from the Hotel segment decreased 4.8% from the year-ago quarter.

Increasing marketing investments continue to be a concern. Further, tough competition from major tech companies also remains a woe.

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 sports a Zacks Rank #1 but has an Earnings ESP of -1.54%. Consequently, surprise prediction is difficult.

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.

Groupon (GRPN - Free Report) has an Earnings ESP of +59.68% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

NVIDIA (NVDA - Free Report) has an Earnings ESP of +0.48% and a Zacks Rank #3.

Agilent Technologies (A - Free Report) has an Earnings ESP of +0.88 and a Zacks Rank #3.

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