TripAdvisor stock holds Buy rating at BTIG amid activist interest

Investing.com - BTIG maintained its Buy rating and $20.00 price target on TripAdvisor (NASDAQ:TRIP) following news of an activist investor stake in the online travel company. According to InvestingPro data, the stock has shown strong momentum with a 22% gain over the past six months, though technical indicators suggest it may be entering overbought territory.

The research firm’s analysis comes as activist investors have reportedly discussed unlocking hidden value and potentially revisiting strategic interest in TripAdvisor, according to BTIG’s report released Thursday. With a current market capitalization of $2.05 billion and a GOOD financial health score from InvestingPro, the company maintains solid fundamentals, including a healthy current ratio of 1.9x.

BTIG first conducted scenario analysis in January 2025 when multiple bids for TripAdvisor emerged in an SEC filing, and has now revisited potential valuation frameworks including leveraged buyout scenarios, sum-of-the-parts analysis, and standalone valuation for the company’s Viator business.

In an LBO scenario, BTIG calculates TripAdvisor could be worth approximately $27 per share, assuming an upfront sale of Viator, approximately 1% legacy revenue compound annual growth rate, high-20s EBITDA margin, and a 6x exit multiple.

The firm’s sum-of-the-parts analysis also yields a similar $27 valuation, with $12 for the legacy business, $16 for Viator/TheFork, and -$1 for net debt, while Viator alone could be worth approximately $2 billion based on low double-digit booking growth, high-teens EBITDA margin, and low double-digit EBITDA multiple. Trading at 45.4x earnings with annual revenue of $1.84 billion, deeper insights into TripAdvisor’s valuation metrics are available through InvestingPro’s comprehensive research reports.

In other recent news, TripAdvisor has reported its first-quarter earnings for 2025, revealing a revenue of $398.2 million, which is a 1% increase from the previous year. This figure surpassed the consensus forecast of $386 million and DA Davidson’s estimate of $389.7 million. The company’s adjusted EBITDA for the quarter was $43.8 million, significantly exceeding the consensus estimate of $24 million. DA Davidson has responded by slightly raising TripAdvisor’s stock price target to $16.25, maintaining a Neutral rating. Meanwhile, activist investor Starboard Value has confirmed a 9% stake in TripAdvisor, valued at approximately $160 million. This investment is seen as a move to engage with the company’s management for potential value creation opportunities. Bernstein has reiterated an Outperform rating on TripAdvisor, setting a price target of $20.00, noting the stock’s perceived undervaluation. These developments reflect TripAdvisor’s ongoing strategic evaluations and investor interest.

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