DA Davidson maintains Neutral rating on TripAdvisor stock amid activist stake

Investing.com - DA Davidson has reiterated its Neutral rating and $16.25 price target on TripAdvisor (NASDAQ:TRIP), currently trading at $17.44, following activist investor Starboard Value’s disclosure of a roughly 9% stake in the $2.07 billion market cap company.

The research firm has amended TripAdvisor’s inclusion in its STAMPEDE list of special situation investment ideas, adding it under the "A for Activist" category after Starboard’s stake was revealed late last week.

TripAdvisor shares have declined approximately 16% over the past year, underperforming the S&P 500 which gained 13% during the same period.

The travel review company was already included in DA Davidson’s STAMPEDE list under the "S for SpinOff" category, relating to potential alternatives for TripAdvisor’s Viator business.

The analyst note comes amid speculation surrounding merger and acquisition interest in TripAdvisor, which has been exploring strategic alternatives throughout 2024.

In other recent news, TripAdvisor has been the focus of significant developments, particularly with activist investor Starboard Value acquiring a 9% stake in the company, valued at approximately $160 million. This move suggests that Starboard sees TripAdvisor as undervalued and plans to engage with the company’s management to explore opportunities for value creation. Meanwhile, Bernstein has reiterated an Outperform rating on TripAdvisor, setting a price target of $20.00, citing the company’s potential for growth and profitability. The firm highlights TripAdvisor’s trading at about six times earnings before the investment, which it considers low for a growing platform.

Additionally, DA Davidson has raised its price target for TripAdvisor to $16.25 from $16.00, maintaining a Neutral rating. This adjustment follows TripAdvisor’s first-quarter earnings report for 2025, which showed revenue of $398.2 million, surpassing both consensus forecasts and the firm’s estimates. The company’s adjusted EBITDA for the quarter was $43.8 million, exceeding expectations and reflecting disciplined operational expenditure.

Citi has also initiated coverage on TripAdvisor with a Neutral rating and a $16.00 price target, acknowledging growth in the Viator brand and positive revenue trends at Brand TripAdvisor. However, Citi expressed caution due to economic uncertainties and ongoing investments. These developments indicate that TripAdvisor is navigating a complex landscape, with analysts closely monitoring the company’s performance and strategic initiatives.

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