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On Friday, Mizuho (NYSE:MFG) Securities updated its outlook on TripAdvisor (NASDAQ:TRIP) stock, increasing the price target to $20 from the previous $17 while maintaining a Neutral rating. Currently trading at $16.50, with a YTD return of 11.71%, InvestingPro analysis suggests the stock is undervalued. The adjustment follows observations of sustained growth within the company’s Viator segment, which continues to experience double-digit expansion despite challenges in the hotel meta search arena.
TripAdvisor has demonstrated resilience, with its experiences and restaurant reservation ventures bolstering margins and compensating for the tougher comparable figures faced by the hotel meta search in the first half of 2025. With an "GOOD" Financial Health score from InvestingPro and a strong current ratio of 2.1, the company’s recent performance indicates signs of sustainable improvement, which bolsters confidence in the projected EBITDA of $386 million for the fiscal year 2026.
The revised price target of $20 reflects a 7x multiple on the estimated FY26 EBITDA, an increase from the previous 6x multiple. This valuation is situated at the lower end of TripAdvisor’s historical range, acknowledging the ongoing business transitions that the company is navigating.
Mizuho’s stance on TripAdvisor is that of a turnaround narrative, with the potential for enhanced monetization of its considerable user base. The firm’s analysis suggests a cautious optimism for TripAdvisor’s financial trajectory, acknowledging the company’s strategic efforts to adapt and grow amidst industry challenges.
In other recent news, TripAdvisor reported a 5% year-over-year increase in fourth-quarter revenue, reaching $411 million, which slightly exceeded analyst expectations. The company’s earnings per share (EPS) of $0.30 surpassed the forecasted $0.21, marking a 43% positive surprise. However, despite these results, TripAdvisor’s stock experienced a decline, reflecting investor concerns over the company’s future guidance. TripAdvisor’s Adjusted EBITDA for the quarter was $73 million, with a margin of 17.8%, outperforming expectations by 35% and 26%, respectively. The company anticipates revenue growth of 5%-7% for the full year, although it expects a slight contraction in Adjusted EBITDA margin to between 16% and 18%.
In terms of analyst activity, JPMorgan raised its price target for TripAdvisor to $15 while maintaining an Underweight rating, noting the ongoing transformation of the Brand TripAdvisor segment. BMO Capital Markets also increased its price target to $18, driven by optimism around the Viator segment, which is expected to grow by 16% due to marketing and product initiatives. TripAdvisor’s management projects stronger performance in the latter half of 2025, particularly in the Viator and TheFork segments, which showed significant revenue growth in the fourth quarter. The anticipated merger with Liberty TripAdvisor Holdings (OTC:LTRPA) is on track for completion in the second quarter of 2025, which could impact the company’s strategic direction moving forward.
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