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On Tuesday, TD Cowen’s analyst Kevin Kopelman revised the price target for Trip.com Group Limited (NASDAQ: TCOM) to $67 from the previous $71, while continuing to recommend the stock as a Buy. Kopelman’s assessment follows Trip.com’s fourth-quarter revenue surpassing expectations with a 23% year-over-year increase, outperforming the guided range of 17-20%. The company, which maintains impressive gross profit margins of 81.6% and has earned a "GREAT" financial health score from InvestingPro, saw this growth through domestic market share expansion and a significant rise in international bookings, where gross booking value (GBV) soared by 70% year-over-year compared to 60% in the third quarter.
The fourth quarter is notably Trip.com’s largest seasonal period, accounting for 14% of the company’s revenue. Looking ahead to the first quarter, revenue is expected to grow by 14-19%, driven by the same positive trends: domestic market share gains against an industry average rising in the mid-single digits, robust outbound travel growth exceeding 20%, and Trip.com’s revenue projected to climb by more than 50%. This momentum builds on the company’s strong 29.7% revenue growth over the last twelve months. Kopelman also noted that the easing of comparisons for China Domestic Hotel in the second quarter could lead to an acceleration of performance.
Despite the optimistic outlook, Trip.com’s stock, trading at $60 after-hours, is currently valued at 17 times the projected 2025 earnings excluding cash, which is considered reasonable. With a current P/E ratio of 19.02 and a market capitalization of $45.09 billion, InvestingPro analysis suggests the stock is slightly undervalued. While concerns about China’s macroeconomic conditions and cash return challenges persist, the company’s strong financial metrics and impressive 53.3% price return over the past six months indicate robust momentum. Kopelman believes that the disclosure of key operating metrics such as GBV, room nights, and air tickets sold could significantly enhance the stock’s valuation multiple. For deeper insights into Trip.com’s valuation and growth potential, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.
In other recent news, Trip.com Group Limited has reported earnings that exceeded revenue expectations by 3%, showcasing strong performance across all business segments. The company has also announced a $400 million share buyback program for 2025 and declared a $200 million dividend for the first time. Barclays (LON:BARC) maintains an Overweight rating with an $84 target, citing robust growth in outbound travel and a booming international segment. Mizuho (NYSE:MFG) Securities reiterated an Outperform rating with a $78 target, highlighting the company’s operational leverage and future growth investments. Bernstein adjusted its price target to $80 from $85 while maintaining an Outperform rating, noting a softer performance but still optimistic about long-term growth. Benchmark analysts reaffirmed their Buy rating with an $80 target, emphasizing Trip.com’s strong market position and earnings predictability. Despite structural challenges, Bernstein maintains an Outperform rating with an $85 target, pointing to Trip.com’s potential to gain market share in the online travel agency sector. These developments reflect a mix of optimism and caution among analysts regarding Trip.com’s future growth trajectory.
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