Tripadvisor (NASDAQ: TRIP), an online travel company providing booking for hotel reservations, transportation, lodging, travel experiences, and restaurants, is scheduled to announce its fiscal fourth-quarter results on Tuesday, February 14. We expect Tripadvisor’s stock to trade lower due to revenues and earnings missing consensus estimates. For the fourth quarter, management expects a moderate step down of Tripadvisor Core revenue, as a percent of 2019, from Q3. This step down is not related to a change in its revenue trends, but to a particularly strong August in Q3 2022 and unique items in Q4 2019 that create a tougher revenue comparison. It should be noted that in 2019, television advertising for the brand Tripadvisor and other expenses were considerably higher in Q3 than in Q4, creating a sequentially harder comparison from an adjusted EBITDA margin perspective, in addition to the impact of the revenue step-down. The company also anticipates a significant foreign currency impact in the fourth quarter, amounting to about a $34 million headwind. While consolidated revenue is expected to increase by a low single-digit percentage from 2019, a modest slowdown from Q3 2022 is expected in the upcoming Q4.
Our forecast indicates that Tripadvisor’s valuation is at $21 per share, which is 13% higher than the current market price. Look at our interactive dashboard analysis on Tripadvisor Earnings Preview: What To Expect in Q4? for more details.
(1) Revenues expected to come in slightly below consensus estimates
Trefis estimates Tripadvisor’s Q4 2022 revenues to be around $340 Mil, slightly below the consensus estimate. In Q3 2022, Tripadvisor’s total revenue came in at $459 million. up 51% year-over-year (y-o-y). To break down the revenue further – Tripadvisor’s Core revenue jumped 34% y-o-y to $284 million, while Viator, an experience-based brand, grew its top line by 138% to $174 million. For the full year 2022, we expect Tripadvisor revenues to rise 64% y-o-y to $1.5 billion.
(2) EPS likely to miss consensus estimates
Tripadvisor’s Q4 2022 earnings per share (EPS) is expected to come in at 3 cents as per Trefis analysis, missing the consensus estimate. In Q3, the revenue gains helped Tripadvisor’s net income jump to $25 million, or $0.18 per share, from a mere $1 million in Q3 2021, or $0.01 per share. Yet despite the sizable increase, the company’s profits came in below consensus estimates in Q3 2022.
(3) Stock price estimate lower than current market price
Going by our Tripadvisor’s Valuation, with an EPS estimate of around 67 cents and a P/E multiple of around 30.9x in fiscal 2022, this translates into a price of $21, which is 13% lower than the current market price.
It is helpful to see how its peers stack up. TRIP Peers shows how Tripadvisor’s stock compares against peers on metrics that matter. You will find other useful comparisons for companies across industries at Peer Comparisons.
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| Returns | Feb 2023 MTD [1] |
2023 YTD [1] |
2017-23 Total [2] |
| TRIP Return | 3% | 34% | -48% |
| S&P 500 Return | 0% | 7% | 83% |
| Trefis Multi-Strategy Portfolio | -2% | 10% | 245% |
[1] Month-to-date and year-to-date as of 2/13/2023
[2] Cumulative total returns since the end of 2016
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
