Stryker shares tumble despite strong Q2 results and raised guidance
On Monday, Bernstein SocGen Group maintained a positive stance on TripAdvisor (NASDAQ:TRIP) stock, with an Outperform rating and a $21.00 price target. Currently trading at $15.11, the stock sits well below analysts’ targets ranging from $12 to $24. According to InvestingPro data, the travel platform’s stock has been under scrutiny as the company navigates through what could be its final transition year.
TripAdvisor’s recent financial results have shown promising signs, particularly in its subsidiary businesses, Viator and The Fork, which are expected to drive double-digit EBITDA growth. With current EBITDA at $149 million and a healthy gross profit margin of 61.4%, the company maintains strong financial fundamentals. Viator has seen its EBITDA double, while The Fork has tripled its EBITDA, indicating sustained momentum. InvestingPro analysis reveals the company holds more cash than debt and maintains a solid current ratio of 2.1, suggesting strong operational stability. These developments support the analyst’s two-part bullish thesis on the company. The first part is the potential stabilization of Brand TripAdvisor, which could lead to an attractive medium-term financial outlook. The second part is the possibility of unlocking value through resolving ownership issues, with management expressing confidence in the benefits of not having a controlling shareholder. This could lead to strategic actions such as buybacks or mergers and acquisitions.
Despite the optimism, TripAdvisor’s shares experienced a 6.8% decline following the earnings report. This downturn was attributed to a combination of factors, including a projected revenue decrease in the first quarter, a downward adjustment of margin guidance for the fiscal year, and potentially overinflated expectations influenced by the performance of peers such as Expedia (NASDAQ:EXPE) Group and Airbnb, along with TripAdvisor’s own 18% stock increase year-to-date.
The analyst believes that if 2025 is indeed the last year of transition and the final year of downward financial guidance, the current market conditions could present an advantageous entry point for investors. Based on InvestingPro’s Fair Value analysis, TripAdvisor appears undervalued at current levels. The commentary emphasizes the potential for TripAdvisor to return to growth in 2026, with analysts expecting net income growth this year. For deeper insights into TripAdvisor’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, TripAdvisor reported its fourth-quarter 2024 earnings, surpassing analyst expectations with an earnings per share (EPS) of $0.30, compared to the forecasted $0.21. The company achieved a consolidated revenue of $411 million for the quarter, slightly exceeding the expected $401.19 million, marking a 5% year-over-year growth. Despite this positive earnings surprise, TripAdvisor’s Brand TRIP segment saw a 6% revenue decline, while Viator’s revenue increased by 16%, showing a strong performance in the experiences category.
Analysts have reacted to these developments with varied updates. Cantor Fitzgerald adjusted its price target for TripAdvisor stock to $13 from $14, maintaining an Underweight rating due to mixed fourth-quarter results. Conversely, Mizuho (NYSE:MFG) Securities raised its price target to $20 from $17, citing sustained growth in the Viator segment and a promising EBITDA outlook for fiscal year 2026. JPMorgan also increased its price target to $15, noting a 5% year-over-year revenue increase in the fourth quarter, but retained an Underweight rating due to cautious future projections.
BMO Capital Markets raised its price target to $18 from $17, maintaining a Market Perform rating, and highlighted the growth potential of Viator, which is expected to achieve a 16% growth rate. TripAdvisor’s management has provided guidance for 2025, projecting a 5-7% revenue growth and an adjusted EBITDA margin of 16-18%. Additionally, the anticipated merger with Liberty TripAdvisor Holdings (OTC:LTRPA) is scheduled for completion in the second quarter of 2025. These developments reflect TripAdvisor’s strategic focus on enhancing its experiences and restaurant reservation ventures amidst industry challenges.
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