A month has gone by since the last earnings report for TripAdvisor (TRIP). Shares have lost about 0.6% 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 its most recent earnings report in order to get a better handle on the important drivers.
TripAdvisor Q1 Earnings and Revenues Rise Y/Y
TripAdvisor reported non-GAAP first-quarter 2023 earnings of 5 cents per share, beating the Zacks Consensus Estimate by 66.7%. The bottom line compares favorably with the year-ago quarter’s loss of 9 cents per share.
Revenues of $371 million surged 42% year over year and surpassed the Zacks Consensus Estimate of $357.75 million.
Top-line growth was driven by growing demand for travel industry-related services. Strong momentum across Tripadvisor Core and Viator contributed well to the top line.
Further, a well-performing TheFork segment benefited the company.
However, adverse foreign currency fluctuations and macroeconomic headwinds affected the quarterly performance.
TripAdvisor reports revenues under three segments: Tripadvisor Core, Viator and TheFork.
Tripadvisor Core: Revenues summed $244 million (accounting for 66% of revenues), up 28% year over year. Revenues from Tripadvisor-branded hotels increased 24% from the prior-year quarter’s level to $168 million. Tripadvisor-branded display and platform revenues jumped 15% year over year to $30 million.
Revenues from Tripadvisor experiences and dining were $33 million, increasing 65% year over year. Other revenues consisting of rentals, flights, cars and cruise revenues were $13 million, up 30% year over year.
Viator: Revenues totaled $115 million (31% of the top line). The figure skyrocketed 105% from the year-ago quarter’s level.
TheFork: Revenues came in at $35 million (9% of revenues), increasing 35% year over year.
TripAdvisor’s selling and marketing costs increased 55.3% year over year to $219 million.
General and administrative costs were up 20% from the year-ago quarter’s level to $48 million. Technology and content costs of $68 million increased 25.9% on a year-over-year basis.
TRIP reported an operating loss of $14 million in the first quarter compared with a $20 million loss in the prior-year quarter.
In the reported quarter, total adjusted EBITDA margin was 9%, down 100 basis points on a year-over-year basis.
Balance Sheet & Cash Flow
As of Mar 31, 2023, cash and cash equivalents were $1.13 billion, up from $1.02 billion as of Dec 31, 2022.
Long-term debt stood at $837 million at the end of the first quarter compared with $836 million at the end of the previous quarter.
Cash generated from operations was $135 million in the reported quarter compared with $40 million of cash used in operations in the prior quarter.
Additionally, free cash flow was $119 million in the first quarter.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -16.67% due to these changes.
Currently, TripAdvisor has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, 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 18.1%. The company reported its results for the quarter ended March 2023 more than a month ago.
Amazon reported revenues of $127.36 billion in the last reported quarter, representing a year-over-year change of +9.4%. EPS of $0.31 for the same period compares with $0.21 a year ago.
Amazon is expected to post earnings of $0.34 per share for the current quarter, representing a year-over-year change of +240%. Over the last 30 days, the Zacks Consensus Estimate has changed +1.4%.
Amazon has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.
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