Stryker shares tumble despite strong Q2 results and raised guidance
Investing.com - Activist investor Starboard Value has acquired a 9% stake in TripAdvisor (NASDAQ:TRIP) worth approximately $160 million, according to a confirmation from the fund on Monday. The stock, currently trading at $17.37, has shown remarkable momentum with a 34% surge in the past week, approaching its 52-week high of $18.66.
Bernstein SocGen Group analyst Richard Clarke reiterated an Outperform rating on TripAdvisor with a $20.00 price target following the news, noting that Starboard likely views the stock as significantly undervalued at its current trading level. InvestingPro analysis supports this view, with the company showing strong financial health and maintaining a healthy current ratio of 1.9x.
The $8.5 billion activist fund has previously invested in technology platforms including eBay (NASDAQ:EBAY), Match.com, and Wix (NASDAQ:WIX), though Starboard has not yet detailed specific strategic changes it might seek beyond stating it considers the stock undervalued.
Bernstein highlighted that TripAdvisor was trading at approximately 6 times earnings before Starboard’s investment, which the firm considers too low for a "growing profitable platform" that includes faster-growing segments like Viator and The Fork.
The research firm also pointed to potential near-term catalysts including a planned turnaround of the core TripAdvisor brand expected by 2026 and the company’s ability to execute share repurchases, with Bernstein forecasting that TripAdvisor’s fiscal year 2026 free cash flow could represent 19% of its recent market capitalization.
In other recent news, TripAdvisor’s first-quarter earnings for 2025 showed revenue of $398.2 million, exceeding the consensus forecast of $386 million. The adjusted EBITDA was reported at $43.8 million, surpassing expectations and highlighting the company’s effective management of operational expenses. Starboard Value has confirmed a 9% stake in TripAdvisor, valued at approximately $160 million, with intentions to engage with the company’s management on opportunities for value creation. DA Davidson has raised TripAdvisor’s price target slightly to $16.25, maintaining a Neutral rating, citing better-than-expected first-quarter performance and a strong start to the second quarter. Meanwhile, Citi has initiated coverage with a Neutral rating and a $16.00 price target, noting growth in the Viator brand and improved revenue trends but expressing caution due to economic uncertainties. Cantor Fitzgerald continues to rate TripAdvisor stock as Underweight, with a price target of $11.00, following a first-quarter earnings report that showed mixed results in revenue and EBITDA. The company also completed a merger with Liberty TripAdvisor, retiring 17% of its shares to enhance corporate flexibility.
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