Should you buy Tripadvisor stock after the Q1 beat? – Trefis

[Updated 08/10/2021] Tripadvisor stock update

Tripadvisor share (NASDAQ: TRIP) has risen 25% to $ 36 so far this year, outperforming broader markets with the S&P 500 up 18%. We expect the company’s stock to grow over the medium term based on the solid Q2 report, reopenings around the world, and pent-up travel demand in countries where many people have been vaccinated. While the growing cases of the Delta variant may dampen this growth in the short term, we believe that the company’s recovery continues to be positive. However, the travel search and user reviews firm has a strong balance sheet to keep it safe from the downturn – with $ 775 million in cash and an additional $ 1 billion in liquidity, while its outstanding debt in June 2021 is $ 830 million Dollar lie.

In the most recent quarter, Tripadvisor exceeded sales and earnings estimates despite a loss of earnings. The company’s revenue increased 91% sequentially from $ 123 million in the first quarter of 2021 to $ 235 million in the second quarter of 2021, and by 300% from just 59 million in the corresponding quarter of 2020. Hotels and media services increased 311% $ 156 million and Experiences and Restaurants rose 386% to $ 68 million. It’s also worth noting that Tripadvisor’s monthly user numbers on its website increased every month in the second quarter of 2021, reaching 59%, 71% and 79%, respectively, of the comparable periods of 2019 through April, May and June. In addition, US monthly unique users in June 2021 accounted for 85% of June 2019 levels, and European monthly unique users topped 90% of the comparable level in 2019 as the regions continued to increase vaccination rates.

Tripadvisor also fully rolled out the Tripadvisor Plus subscription service (US only) in the second quarter at a cost of $ 99 per year as subscription fees are popular with businesses to build customer loyalty and grow their business. To give an overview of this service: Before Covid, Tripadvisor saw around 400 million individual active users per month and already has more than 100 million users (currently a free service). Tripadvisor Plus includes discounts on many tickets, tours and attractions as well as personalized travel tips and discounted stays in more than 100,000 hotels around the world. The company expects the service will save members an average of $ 350 per stay.

Over with us Tripadvisor rating, with estimated revenue per share (RPS) of around $ 6.49 and a P / S multiple of 6.2x in fiscal 2021, that equates to a price of $ 41, which is a premium of nearly 13% compared to the current market price of $ 36.

[Updated 08/04/2021] Tripadvisor earnings forecast for the second quarter

Tripadvisor (NASDAQ: TRIP), an online travel company that offers bookings for hotel reservations, transportation, lodging, travel experiences and dining, is expected to announce its second quarter financial results on Thursday, August 5th. We expect Tripadvisor stock to trade likely higher after the second quarter, with both revenue and earnings beating consensus estimates. The companys The business grew modestly in the first quarter of 2021 as it benefited from pent-up travel demand in countries where many people were vaccinated. Travel activity is expected to rebound, particularly for the US economy, as most pandemic restrictions wear off (mostly in the second quarter) and 49.7% of the US population are fully vaccinated. However, air travel and vacation trends are unlikely to fully recover until the Covid-19 threat passes, but vaccination has got consumers back to planning vacation trips. However, the recent spikes in new Delta variant Covid cases could change that in the future.

Our forecast shows that Tripadvisor’s rating is $ 43 per share, which is 16% above the current market price of $ 37. Check out our interactive dashboard analysis Tripadvisor Pre-earnings: what to expect in the second quarter? for more details.

(1) Revenues are expected to exceed consensus estimates

Trefis estimates Tripadvisor revenues for the second quarter of 2021 at around $ 192 millionil, 2% above consensus estimate. The company’s revenue increased 6% sequentially from $ 116 million in the fourth quarter of 2020 to $ 123 million in the first quarter of 2021. However, TRIP’s revenue declined 56% year over year in the first quarter and was at About 33% of the comparable period of 2019. It is also worth mentioning that the monthly user numbers of Tripadvisor on its website increased slightly every month in the first quarter of 2021 and reached 53%, 56% and 58% of the comparable periods of 2019 by January, February and March, respectively.

Tripadvisor has looked at a recurring revenue stream and has launched its new travel subscription (US only) that will cost $ 99 per year in June 2021. To give you a perspective, Tripadvisor already has more than 100 million users of free service. In addition, there were around 400 million individual monthly active users before Covid. Subscription fees are popular with businesses to build loyalty and grow their business. Tripadvisor’s new service includes discounts on many tickets, tours and attractions, personal travel tips and discounted stays in more than 100,000 hotels around the world. The company expects the service will save members an average of $ 350 per stay.

We expect Tripadvisor sales for the full year 2021 44% year over year to $ 868 million.

(2) Earnings per share likely to exceed consensus estimates

Tripadvisor earnings per share (EPS) in the second quarter of 2021 is expected to show a loss of 9 cents, according to Trefis analysis, which is slightly better than the consensus estimate of -11 cents. While The company has a strong balance sheet to protect it from the current downturn ($ 674 million in cash and an additional $ 1 billion in liquidity).

(3) Share price estimate higher than current market price

Based on our Tripadvisor rating, with estimated revenue per share (RPS) of about $ 6.48 and a P / S multiple of about 6.6x in fiscal 2021, this results in a price of $ 43, which is 16% above current market price is around $ 37.

It’s helpful to see how your colleagues stack up. Check out the Tripadvisor Peer Share Comparison to see how Tripadvisor compares against peers on key metrics.

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