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Investing.com - BofA Securities initiated coverage on TripAdvisor (NASDAQ:TRIP) with a Neutral rating and a $19.00 price target on Monday. The stock, which has gained nearly 22% year-to-date, is currently trading near its 52-week high of $18.66, according to InvestingPro data.
The financial services firm noted that TripAdvisor’s core hotel price comparison business faces significant challenges from Google (NASDAQ:GOOGL) and online travel agencies, prompting the company to focus on building its Viator experiences platform and TheFork restaurant reservation service.
BofA Securities pointed out that while Viator now represents 43% of TripAdvisor’s total revenue, both Viator and TheFork operate at lower margins compared to the company’s core business, negatively impacting overall consolidated EBITDA.
The firm expressed a constructive view on growth potential in the online experiences sector but cautioned that intense competition would likely remain an overhang for TripAdvisor’s business.
BofA Securities also highlighted that activist investor Starboard Value’s recent acquisition of a 9% stake in TripAdvisor had boosted the stock to near its two-year average of 1.1x 2026E EV/Sales, though this valuation remains below the company’s 10-year average of 3x.
In other recent news, TripAdvisor has drawn significant attention from activist investors, notably Starboard Value, which confirmed a 9% stake in the company valued at approximately $160 million. This development has led to several analyst firms revisiting their ratings and projections for TripAdvisor. BTIG has maintained a Buy rating with a $20 price target, exploring various valuation scenarios, including a leveraged buyout that could value the company at $27 per share. Meanwhile, DA Davidson has reiterated a Neutral rating with a $16.25 price target, highlighting TripAdvisor’s inclusion in its STAMPEDE list due to the activist interest. Bernstein has also reiterated an Outperform rating, with a $20 price target, indicating that TripAdvisor’s valuation is considered low for its growth potential. The firm suggests that the company could benefit from potential near-term catalysts, such as a turnaround of its core brand by 2026. Starboard Value has expressed intentions to engage with TripAdvisor’s management to explore opportunities for value creation. These recent developments suggest a period of strategic evaluation and potential change for TripAdvisor as it navigates the interests of its investors.
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