Why Is TripAdvisor (TRIP) Down 2.8% Since Last Earnings Report?

A month has gone by since the last earnings report for TripAdvisor TRIP. Shares have lost about 2.8% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is TripAdvisor due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

TripAdvisor Q4 Earnings & Revenues Beat, Rise Y/Y

TripAdvisor reported non-GAAP fourth-quarter 2023 earnings of 38 cents per share, beating the Zacks Consensus Estimate by 72.7%. The bottom line significantly jumped from the prior-year quarter's figure of 7 cents.

Revenues of $390 million increased 10% year over year and surpassed the Zacks Consensus Estimate of $372.9 million.

Top-line growth was driven by strong momentum in the Viator segment. A well-performing TheFork segment also benefited the company.

However, weakness in hotel meta offerings in Europe was a concern.

Quarterly Details

TripAdvisor reports revenues under three segments: Tripadvisor Core, Viator and TheFork.

Tripadvisor Core: Revenues summed $218 million (accounting for 55.9% of revenues), up 0.5% year over year. The figure came above the consensus mark of $208 million. Media and advertising revenues jumped 6% year over year to $35 million.

Revenues from Tripadvisor experiences and dining were $38 million, increasing 12% year over year. Other revenues within the segment were $10 million, which remained flat year over year.

However, revenues from Tripadvisor-branded hotels decreased 4% year over year to $135 million due to a decline in European hotel meta offering.

Viator: Revenues totaled $161 million (41.3%). The figure increased 27% year over year and surpassed the Zacks Consensus Estimate of $156 million.

TheFork: Revenues came in at $39 million (10%), increasing 18% year over year. The figure was above the consensus mark of $37.7 million.

Operating Results

TripAdvisor's selling and marketing costs decreased 7.7% year over year to $179 million.

General and administrative costs were down 18.9% from the year-ago quarter's level to $47 million.

Technology and content costs of $68 million increased 13.4% on a year-over-year basis.

TRIP reported operating income of $31 million in the reported quarter against $13 million of operating loss in the year-ago quarter.

In the reported quarter, the total adjusted EBITDA margin was 21.5%, which expanded 940 bps on a year-over-year basis.

Balance Sheet & Cash Flow

As of Dec 31, 2023, cash and cash equivalents were $1.07 billion compared with $1.12 billion as of Sep 30, 2023.

Long-term debt stood at $839 million at the end of the fourth quarter, which remained flat compared with the previous quarter's figure.

Tripadvisor used $19 million of cash in operations in the reported quarter against $14 million of cash generated from operations in the prior quarter.

Free cash outflow was $35 million in the fourth quarter.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates flatlined during the past month.

The consensus estimate has shifted -1734.29% due to these changes.

VGM Scores

At this time, TripAdvisor has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

TripAdvisor has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

TripAdvisor is part of the Zacks Internet - Commerce industry. Over the past month, Amazon AMZN, a stock from the same industry, has gained 5.3%. The company reported its results for the quarter ended December 2023 more than a month ago.

Amazon reported revenues of $169.96 billion in the last reported quarter, representing a year-over-year change of +13.9%. EPS of $1.01 for the same period compares with $0.21 a year ago.

For the current quarter, Amazon is expected to post earnings of $0.81 per share, indicating a change of +161.3% from the year-ago quarter. The Zacks Consensus Estimate has changed +1.5% over the last 30 days.

Amazon has a Zacks Rank #2 (Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.

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