Stryker shares tumble despite strong Q2 results and raised guidance
On Friday, Cantor Fitzgerald analyst Deepak Mathivanan adjusted the price target for TripAdvisor (NASDAQ:TRIP) stock, reducing it to $13 from the previous $14, while maintaining an Underweight rating on the company. Currently trading at $16.50, InvestingPro analysis suggests the stock is undervalued, with analyst targets ranging from $12 to $24. The stock trades at a relatively high P/E ratio of 63.5x, reflecting market optimism despite recent challenges. The adjustment followed TripAdvisor’s fourth-quarter earnings report, which presented mixed results. Although the company’s revenue of $1.835 billion and EBITDA of $198 million surpassed Wall Street’s expectations by 3% and 26% respectively, according to data from Visible Alpha, there were notable variances within different segments of the business. InvestingPro subscribers can access 8 additional key insights about TripAdvisor’s financial health and growth prospects through exclusive ProTips.
TripAdvisor’s Brand TRIP segment experienced a 6% year-over-year revenue decline in the fourth quarter, which was an improvement compared to the 12% year-over-year decline observed in the third quarter. Conversely, Viator, another segment of the business, saw its revenues increase by approximately 16% year-over-year, marking an acceleration of around 5 percentage points.
Looking ahead, TripAdvisor has provided guidance for the first quarter, expecting revenues to be flat or to show a low single-digit decline year-over-year, with EBITDA margins projected to be between 5-7%. These figures contrast with market expectations, which anticipated a 1% year-over-year revenue increase and a 10% EBITDA margin. Furthermore, the company’s forecast for fiscal year 2025 suggests a modest acceleration in revenue growth, targeting a 5-7% increase year-over-year.
Additionally, TripAdvisor anticipates an EBITDA margin compression of approximately 150 basis points at the midpoint for fiscal year 2025. Despite the sequential progress observed in TripAdvisor’s core business and a strong liquidity position with a current ratio of 2.1, the long-term fundamental outlook, particularly for the Hotel Meta (NASDAQ:META) segment, remains uncertain. Mathivanan acknowledged the positive trends in the fourth quarter but expressed continued concerns about the company’s structural long-term challenges. For a comprehensive analysis of TripAdvisor’s financial health and future prospects, investors can access the detailed Pro Research Report available on InvestingPro.
In other recent news, TripAdvisor reported its fourth-quarter 2024 earnings, exceeding analyst expectations with an earnings per share (EPS) of $0.30, surpassing the forecasted $0.21. The company’s revenue for the quarter was $411 million, reflecting a 5% year-over-year increase, driven by strong performances in its Viator and TheFork segments. Despite these positive results, TripAdvisor’s stock experienced a decline, as investors remained cautious about the company’s outlook and challenges in its Brand TripAdvisor segment. Additionally, TripAdvisor is on track to complete its anticipated merger with Liberty TripAdvisor Holdings (OTC:LTRPA) in the second quarter of 2025.
Analyst firms have adjusted their price targets for TripAdvisor following these developments. Mizuho (NYSE:MFG) Securities raised its target to $20, citing sustained growth in the Viator segment, while maintaining a Neutral rating. JPMorgan also increased its price target to $15 but kept an Underweight rating, noting that while the Viator and TheFork segments show promise, the transformation of Brand TripAdvisor is still in progress. BMO Capital Markets revised its price target to $18, highlighting optimism for Viator’s growth and maintaining a Market Perform rating.
Looking ahead, TripAdvisor projects a revenue growth of 5%-7% for 2025, with an adjusted EBITDA margin of 16%-18%. The company expects the latter half of 2025 to show stronger performance due to challenges in the hotel meta segment earlier in the year. Analysts remain cautiously optimistic, acknowledging both the potential for growth and the ongoing transitions within the company.
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