TripAdvisor Q3 Earnings Runway Looks Long: Viator To The Rescue?

Tripadvisor Inc TRIP will be reporting its third-quarter earnings on Nov. 6 after market hours.

The 13-year-old company expanded its services to include a tour and adventure marketplace, as well as advertising and marketing solutions for businesses in the travel industry.

Here's how the stock currently maps against Wall Street estimates.

Business & Fundamentals: Tripadvisor faces competition from Airbnb ABNB, Booking BKNG and Expedia EXPE. But, the Street remains bullish on Viator, the company’s marketplace for tours, activities, and attractions. It’s Tripadvisor’s most profitable segment.

Viator revenue grew 59% year-on-year as of the last reported quarter, but it isn’t profitable.

The company’s overall debt and liquidity position appear healthy, and return ratios appear to be indicating a turnaround. The company’s margin profile has also recovered from the Covid-dip, but there is still a path ahead to reach pre-pandemic levels.

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

Q3 Analysts' Focus: Goldman Sachs’s GS analyst, Benjamin Miller, recently initiated coverage on TRIP stock with a target price of $22. Miller sees secular growth tailwinds on the back of revenue growth accelerating at Viator, Experiences. Miller also sees scale efficiencies kicking in, ensuring healthy cash flow generation and business profitability.

Accordingly, analysts and investors would be keenly focused on the growth achieved from Tripadvisor’s Viator asset.

Ratings & Consensus Estimates: Analysts expect Tripadvisor to report 46 cents in EPS and $505.03 million in revenue. For the fiscal year ending December 2023, the Street expects TRIP to report an EPS of $1.01 and $1.74 billion in revenue. Overall analysts’ consensus suggests the stock is a Hold currently, at least until a clearer path to profitability is visible.

Price Action: The stock closed at $15.75 at market close on Friday. The stock, however, has been losing steam over the past year, down 32%. Over the past month, the stock has traded between $14.3 and $16.60 a share.

Read Next: Is Trip.com About To Take Off?