KeyBanc: TripAdvisor's Quarter Shows Consumers May Have Forgotten The Site's Value

Tripadvisor Inc TRIP reported third-quarter earnings Monday with a 1 cent-per-share earnings beat, but revenue of $439 million fell short of the $451.8 million analysts were expecting. Hotel revenue of $312 million also fell short of the $326.2 million analysts projected. 

The Analyst

KeyBanc Capital Markets' Brad Erickson. 

The Rating

Erickson maintains a Sector Weight rating on Tripadvisor's stock with no assigned price target. (See Erickson's track record here.) 

The Thesis

Tripadvisor's earnings report may have eased some concerns over near-term EBITDA downside, as the company made it clear it's "holding back" on spending, Erickson said in a Monday note. But at the same time, the company's earnings report fell short on various key metrics such as revenue per shopper.

It remains unclear when revenuer per shopper will show signs of growth, Erickson said. The company may need to "reeducate consumers about the value and purpose" of its online travel agency and brand, which unfortunately might prove to be an uphill battle, the analyst said. 

Price Action

Shares of Tripadvisor were trading lower by more than 12 percent early Tuesday morning and are also lower by around 15 percent since the start of 2017.

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