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On Tuesday, CFRA analyst Siti Salikin adjusted the price target for Trip.com Group Limited (NASDAQ:TCOM) shares, increasing it from $60.00 to $65.00 while sustaining a Hold rating on the stock. The new target is based on a projected price-to-earnings (P/E) ratio of 18.1 times for the year 2025, which is significantly lower than the company’s five-year average P/E of 41.0 times. According to InvestingPro data, TCOM currently trades at a P/E of 18.68, with analysis suggesting the stock is undervalued relative to its Fair Value. The revision reflects expectations of a slight decrease in Trip.com’s bottom line for 2025 following three years of robust growth.
Salikin anticipates that Trip.com’s revenue growth will slow down to 14.8% in 2025 and 13.5% in 2026. This moderation is attributed to the diminishing effects of pent-up demand and rising global macroeconomic uncertainties. The 2024 forecast for revenue growth stands at a higher 19.7%. InvestingPro analysis reveals the company maintains impressive gross profit margins of 81% and has earned a "GREAT" financial health score, with 8 additional ProTips available to subscribers. Despite the slowdown, growth is expected to be supported by the resurgence of domestic travel and international tourism. Factors contributing to this include visa-free policies between China and various countries and the recovery of cross-border flight capacities.
Trip.com’s efforts to expand into lower-tier cities within China and broaden its range of product offerings are also predicted to bolster the company’s growth. However, the analyst forecasts a dip in net margin in 2025 due to an increase in sales and marketing expenses as competition intensifies in the market. An improvement in net margin is expected in 2026, which should be facilitated by economies of scale and productivity enhancements.
The CFRA analyst has maintained the Earnings Per American Depositary Share (EPADS) estimates for Trip.com at CNY25.80 for 2025 and CNY30.33 for 2026. These projections are integral to the analyst’s valuation model and support the rationale behind the updated price target. InvestingPro data shows the company holds more cash than debt and maintains strong liquidity ratios, with current assets exceeding short-term obligations by 1.46x. A comprehensive Pro Research Report detailing Trip.com’s financial position and growth prospects is available to subscribers.
In other recent news, Trip.com Group Limited reported a 16.2% year-over-year increase in first-quarter revenue for 2025, reaching 13.8 billion yuan, aligning with market estimates. The company’s operating profit hit 3.56 billion yuan, although its gross margin of 80.4% fell short due to a higher revenue share from its own services. Trip.com has confirmed its financial outlook for the second quarter and the full year of 2025, aiming for mid-teens growth, driven by strong international travel demand. Analysts from Benchmark and Jefferies maintained their Buy ratings, with Jefferies raising the price target to $80, reflecting confidence in the company’s market share potential and strategic positioning.
Citi analysts also raised their price target from $75 to $78, citing robust domestic hotel bookings and outbound travel volumes. Despite challenges like a weaker domestic average daily rate, Citi anticipates continued momentum supported by ongoing marketing efforts. Bernstein SocGen Group analysts reiterated an Outperform rating with a $75 target, noting strategic discounting in airfare to counter competitive pressures. Trip.com’s strategic focus includes enhancing user engagement through artificial intelligence and expanding global operations. The company has filed its unaudited financial results for the first quarter with the SEC, providing detailed insights into its financial health and performance.
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