JPMorgan raises TripAdvisor stock target to $15, keeps underweight

On Friday, JPMorgan analyst Doug Anmuth increased the price target for TripAdvisor (NASDAQ:TRIP) shares to $15.00 from the previous $14.00 while maintaining an Underweight rating on the stock. The adjustment follows TripAdvisor’s fourth-quarter revenue report, which showed a 5% year-over-year increase to $411 million, slightly surpassing JPMorgan and consensus estimates. The company’s Adjusted EBITDA reached $73 million, boasting a 17.8% margin and outperforming expectations by 35% and 26%, respectively. According to InvestingPro analysis, TripAdvisor currently trades at a P/E ratio of 63.5x, with the platform’s Fair Value analysis suggesting the stock may be undervalued despite its high multiple. The company maintains a GOOD overall financial health score of 2.8 out of 5.

Despite the positive fourth-quarter results, TripAdvisor provided a cautious first-quarter outlook. Factors such as foreign exchange fluctuations, holiday timing, and challenging year-over-year comparisons were cited as contributing to the softer projection. For the full year, TripAdvisor anticipates revenue growth of 5%-7%, an acceleration from the 3% growth in 2024. However, the Adjusted EBITDA margin is expected to contract slightly, with forecasts between 16% and 18%. InvestingPro data shows the company maintains strong liquidity with a current ratio of 2.1, indicating robust ability to meet short-term obligations.

Looking ahead to 2025, management expects the latter half of the year to be stronger due to difficult pricing comparisons in the hotel meta segment during the first half. Furthermore, TripAdvisor management projects an acceleration in revenue growth in 2026 and a return to positive growth in Adjusted EBITDA. Additionally, the anticipated merger with Liberty TripAdvisor Holdings (OTC:LTRPA) is on track to be completed in the second quarter of 2025.

Anmuth noted that while the performance of Viator and TheFork is promising, the ongoing transformation of the Brand TripAdvisor from a hotel meta-led business to one focused on travel planning and guidance is still in the early stages. This transition is currently impacting revenue and Adjusted EBITDA growth. As a result of these factors, JPMorgan’s Adjusted EBITDA projections for TripAdvisor have been revised downward by 5% for 2025 and 7% for 2026 due to persistent margin pressures. The December 2025 price target of $15 is based on approximately 4 times the firm’s estimated 2026 Adjusted EBITDA for TripAdvisor. For deeper insights into TripAdvisor’s transformation strategy and comprehensive financial analysis, access the detailed Pro Research Report available exclusively on InvestingPro, which covers this and 1,400+ other top US stocks.

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 also reported consolidated revenue of $411 million for the quarter, slightly above the expected $401.19 million, marking a 5% year-over-year growth. Revenue growth was notably driven by strong performances in the Viator and TheFork segments, which reported revenue growth of 16% and 18%, respectively. Despite these positive results, the Brand TripAdvisor segment experienced a 6% decline in revenue, indicating challenges within its traditional business model.

Additionally, BMO Capital Markets recently raised its price target for TripAdvisor shares to $18 from $17, maintaining a Market Perform rating. This decision reflects adjustments in growth expectations for the Brand TripAdvisor segment, while showing optimism for Viator’s prospects, with growth estimates rising to 16% from 15%. The analyst noted that this optimism is bolstered by marketing efforts and product initiatives. TripAdvisor’s revenue forecasts for 2025 and 2026 are expected to remain largely the same, with minor adjustments in EBITDA projections due to ongoing demand stimulation strategies.

Furthermore, TripAdvisor announced a planned merger agreement with Liberty TripAdvisor, which is expected to retire approximately 27 million shares, with the transaction anticipated to close in the second quarter of 2025. This merger is part of TripAdvisor’s broader strategy to streamline its capital structure and enhance strategic flexibility. The company continues to focus on its growth marketplaces, with Viator and TheFork now contributing significantly to group profit.

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