TripAdvisor gains on guidance hike

Though it missed Q1 estimates, TripAdvisor (TRIP +1.9%) used its CC (transcript) to guide for "high 20s to low 30s" 2014 revenue growth, up from a prior forecast of mid-20s growth and above a 25.8% consensus. EBITDA is expected to grow at a similar clip.

Thanks to "strong auction dynamics, " click-based (search ad) revenue is now expected to grow at a high-20s in 2014 (up from low-20s). Subscription/transaction/other is expected to grow at a high-60s rate (up from low-50s), and display ads are still expected to see mid-to-high teens growth.

Click-based revenue only rose 16% Y/Y in Q1, but was up over 30% in April. Display ad sales rose 28% in Q1 on the back of 30% impression growth (fueled by a 27% increase in monthly unique visitors to 250M), and subscription/transaction/other revenue rose 62% on strong demand for business and vacation rental listings.

47% of March traffic came from mobile devices, and cumulative app downloads have topped 100M.

Cantor, Stifel, and RBC have hiked their PTs. Cantor's Naved Khan thinks an upcoming TV ad campaign and new initiatives such as TripConnect could yield additional upside to growth.

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