TripAdvisor Soars on Q1 Earnings Report

TripAdvisor TRIP released its fiscal Q1 earnings on Tuesday after the closing bell. The company reported GAAP earnings of $48.1 million, a 2 percent gain versus the $47.3 million the company reported in the year ago period. On a per share basis, earnings were $0.35, flat compared to last year's first-quarter. On an adjusted basis, which is comparable to analysts' consensus, TRIP reported earnings of $52.5 million or $0.38 per share, versus $50.2 million or $0.38 per share, last year. This easily surpassed analysts' consensus EPS estimates of $0.33. First-quarter revenues rose 23 percent to $183.7 million compared to $149.2 million in last year's corresponding quarter. This also came in ahead of Wall Street consensus estimates of $174.41 million. On the back of the very strong earnings report, TRIP shares have soared during Wednesday's trading session. Nearing the close of the day, the stock had added more than 16% to $42.45. In the wake of Wednesday's rally, TRIP is now trading near new all-time high levels. The stock has traded in a range between $23.99-$44.46 since the company was spun-off from Expedia, Inc. EXPE and began trading publicly on December 23, 2011. Since the stock's first day trading on NASDAQ, TRIP shares have risen 73.5%. Year-to-date, TRIP is up almost 70%. TripAdvisor is a travel website which assists customers in gathering travel information, posting reviews and opinions of travel-related content and engaging in interactive travel forums. The website's services are free to users, who provide most of the content, and the website is supported by an advertising business model. The company also operates a number of other travel related brands besides TripAdvisor. These include Airfarewatchdog, BookingBuddy, Cruise Critic, Family Vacation Critic, FlipKey, Holiday Lettings, Holiday Watchdog, Independent Traveler, OneTime, SeatGuru, SmarterTravel, SniqueAway, Travel Library, TravelPod, VirtualTourist and Kuxun.cn. The company operates its websites in a myriad of different countries on five different continents. On Wednesday morning, a number of investment banks raised their earnings and revenue estimates for TripAdvisor, including Nomura Securities and Barclays. Analysts at Bank of America also upgraded the stock to Buy with a $53.00 price target. The firm also raised its 2012 and 2013 revenue and EBITDA estimates for the company. The analysts wrote that "TripAdvisor's research based platform lies at the heart of the online travel ecosystem and we continue to see the company as a strong secular grower with high sustainable barriers to entry. We have been a believe in TRIP's long-term prospects and a strong Q1 assuaged our fears that management may further take down 2012 estimates as they work through the Expedia separation." TRIP shares currently trade at a trailing P/E of 32.27, a forward P/E of 25.82 and a PEG ratio of 2.07. From a technical perspective, TRIP is showing considerable relative strength. The stock is now trading 26.49% above its 50-day moving average and 35.66% above its 200-day moving average. The next key level for the stock will be its all-time high around $44.46. If TRIP can break this level to the upside in the coming weeks, the stock may be set for more gains in the second half of the year.