TripAdvisor, Clear Secure See Growth, Vacasa Awaits Clarity, Says Analyst About These Online Travel Companies

Goldman Sachs analyst Benjamin Miller took a look at online travel stocks, now that the industry has gone past COVID-19 and increasingly moving beyond the pent-up demand post-pandemic. 

Miller framed his view of the structural growth outlook for online travel and what implications that has throughout the travel ecosystem for demand, customer acquisition and marketing costs.

The analyst initiated coverage on: 

TripAdvisor Inc TRIP with a Buy rating and a price target of $22.

Clear Secure Inc YOU with a Buy rating and a price target of $24.

Vacasa Inc VCSA with a Neutral rating and a price target of $11.

Trip Advisor: Miller said the structural growth profile of the business was changing as metasearch gives way to lower funnel businesses exposed to secular growth tailwinds (primarily Experiences through Viator). The analyst saw an upside to Street estimates on the back of faster revenue growth at Viator, Experiences and scale/operating efficiencies, leading to better profitability.
Healthy FCF generation (with capacity for capital returns to shareholders) and SOTP framework resulted in Trip Advisor as compelling, with the Viator asset value unlock as a potential catalyst. 

Clear: Miller viewed Clear as a quality growth technology asset, growing ~15-20% over the medium term, increasing the platform's utility.

The analyst saw an upside to estimates of revenue and EBITDA driven by substantial subscriber additions and retention while scaling against its cost base. The FCF profile of the business left the capacity for additional return of capital to shareholders. 

Vacasa: On a longer-term view, Miller viewed Vacasa as exposed to the secular tailwinds of the alternative accommodations/vacation rental market with a solid runway for growth over his forecast period as this sub-segment of lodging continues to gain consumer adoption and takes a share of the broader travel market.

Miller looked for better visibility into the normalization of demand trends in Vacasa's core markets (domestic suburban vacation rentals) as urban and international travel return.

TRIP, YOU, VCSA Price Actions: Trip Advisor shares traded higher by 1.29% at $16.50; Clear shares traded higher by 6.29% at $18.42 and Vacasa shares traded lower by 0.33% at $9.17 at publication Tuesday.

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