On Thursday, Cantor Fitzgerald initiated coverage on shares of TripAdvisor (NASDAQ:TRIP) with an Underweight rating and a price target of $12.00. The firm pointed to the company's eroding fundamentals, particularly noting the accelerated decline in sales within its Core segment.
The firm expressed concerns regarding TripAdvisor's ability to sustain growth or expand its margins in the future. Despite the introduction of new experiences and products, the analyst firm believes that the significant headwinds faced by the company's core hotel meta-search business could outweigh these efforts.
Cantor Fitzgerald also mentioned the possibility of TripAdvisor going private or being bought out by a financial sponsor as the most likely outcome for the company. However, they indicated that the timing and price of such an event are uncertain.
TripAdvisor's stock is now being closely watched after this new coverage, with the market considering the challenges outlined by Cantor Fitzgerald. The new price target reflects a cautious outlook on the company's financial performance moving forward.
In other recent news, TripAdvisor has been the subject of analysis by TD Cowen, which has lowered its price target for the company's stock from $25 to $15 while maintaining a hold rating. The firm cites disappointing Q2 performance, with a 10% decrease in core revenue year-over-year and slowing growth in gross booking value for Viator, a TripAdvisor company. The firm also anticipates further deceleration in the third quarter.
TripAdvisor reported a slight 1% year-over-year increase in Q2 revenue, reaching $497 million, and an adjusted EBITDA of $97 million. Despite a 10% decline in Brand TripAdvisor revenue, Viator and TheFork registered revenue growth of 13% and 11% respectively. The company also repurchased 1.4 million shares at an average price of $18.28, spending approximately $25 million.
However, the company's outlook for Q3 predicts flat to slightly down revenue growth, with a decrease in adjusted EBITDA margins. For the full year, revenue is expected to grow in the low single digits, with declines in Brand TripAdvisor but improved profitability in Viator and TheFork. These are some of the recent developments in the company.
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