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joebine
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Momentum, long/short equity, event-driven, growth
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  • TripAdvisor Up Post Earnings 0 comments
    Feb 12, 2014 1:15 PM | about stocks: TRIP, EXPE

    TripAdvisor is currently up 8% in the trading session. The trend of a long play in TripAdvisor following an Expedia positive earnings announcement continues. On February 6, Expedia easily beat on both earnings and revenue. Since the report, shares are up 17%. TripAdvisor reported Q4 EPS in-line and managed to beat revenue by $6.9M up 25.6% Y/Y. Mobile traffic doubled to 40% in 2013, app downloads up 150%. Travel listings up 80% to 550K, business listing subs 38%. CPC ad sales contributed 68% revenue, display ads 15%, other businesses 17%. North American sales 51% of revenue up 22%, EMEA 30%, Asia-Pacific 40% and Latin America unchanged. The company provided strong guidance, expecting 2014 revenue growth at mid-20%s versus consensus of 21.9%, EBITDA to have the same growth rate. Click-based sales growth in the low 20%s, display ads high-teens, subscriptions and other businesses in the low 50%s.

    Today, buy-side Vanguard Group has disclosed in a 13G filing a 5.71% stake in the online travel website. Sell-side Goldman Sachs reiterated a Neutral rating on the stock, raising its price target by $6 to $78 following the Q4 report citing acceleration in click-based and display advertising with higher meta pricing. The Neutral rating is due to the current price levels suggesting a hefty premium paid for the stock compared to its sector growth rate. Susquehanna reiterated a Negative rating increasing its price target by $6 to $67 on deceleration in hotel shopper growth to 25% YoY which the firm expects the slow growth trend to continue, with current forecast at 24% YoY for 2014. Hotel shopper growth concerns overshadowed TRIP's upbeat guidance for click-based, display and subscription revenue growth YoY. RBC analysts were much more bullish post earnings, upgrading the stock to Outperform, and raising its price target from $68 to $95 on Q4 results, 2014 guidance and Meta pricing. Other notable rating changes include Wunderlich at Hold boosting price target by $8 to $88 and Evercore by $6 to $74.

    TripAdvisor's multiples point that the stock is expensive at current level with investors willing to pay a hefty price to own the stock. Its P/E is 55.76, Forward P/E 38.36, PEG 3.09, P/S 13.33 and P/B 14.49. Gross Margin 98%, ROE 27.30%, ROI 18.30%. Institutional Ownership is 95% and short float is high at 20.15%. In comparison Expedia has a P/E of 74.05, Forward P/E 17.54, PEG 5.54, P/S 2.22, P/B 4.65, ROE 6.50%, ROI 10.90%, Gross Margin 77.90%, Institutional Ownership 94.20% and a Short Float of 11.62%. Priceline looks cheaper in this sector with P/E 35.22, Forward P/E 23.65, PEG 1.75, P/S 9.68, P/B 9.75, ROE 35.80%, ROI 27.90%, Institutional Ownership 98.10% and a Short Float of 2.68%.

    The daily chart shows TRIP breaking through the 52w highs at $90.43 made back in November 15 and is currently trading above that price at $91 with volatility down 18.34% to 33.64%. If the stock closes above the 52w highs and the 10MA crosses the moving averages above it, this may create an additional bullish run taking in consideration the massive short float that as a double edged sword may crate a short squeeze opportunity as well as a short sale in the stock if any weakness occurs.

    (click to enlarge)

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