Maria Zahid • Wed, Jan. 21
TripAdvisor Continues Its Acquisition Spree With The Dutch Iens As Its Latest PickMaria Zahid • Wed, Jan. 21
- Earlier this month TripAdvisor announced that it had agreed to buy Iens, a leading Dutch online restaurant review and booking site.
- The new acquisition will allow TripAdvisor customers to have access to more than 20,000 new restaurant reviews and will allow them to book tables at different restaurants through SeatMe.
- Net income for the quarter came out to be $54 million as compared to $56 million from the same period last year, leaving EPS at $0.38.
- The loss in profits occurred as TripAdvisor amped up their marketing campaign which has eaten into their earnings. Selling and marketing costs for the quarter stood at $159 million.
- The travel services providing website’s fundamentals are strong, with their focus currently on improving customer satisfaction through their mobile products, as well as their expansion into the restaurant reservation platform.
- Priceline and Expedia have refused to make their hotel inventory available to TripAdvisor’s new direct booking feature, Instant Booking.
- Instant Booking is a mix between a metasearch website and an OTA.
- Instant Booking is experiencing slow adoption by hotels and it will be many years before it can begin to become a threat to the leading OTAs.
- P/E ratio is at 60 and P/B ratio is 13.63. This screams overvaluation for investors. Latest earnings results missed estimates by a huge margin (3rd consecutive quarter estimates were missed).
- Ebola will continue to be a headwind for travel companies and if more cases are reported, their profits will be hit hard.
- Crude oil has formed a firm intermediate bottom. Higher oil prices will put pressure on the travel and airline industries.
TripAdvisor's Strong Q3 2014: Better Platforms, Aggressive Expansions And Wide PromotionsMaria Zahid • Nov. 3, 2014
- Market leading travel review company TripAdvisor Inc. (NASDAQ: TRIP) will announce its earnings for the 3rd quarter of 2014 on November 4th.
- Looking at TripAdvisor’s last reported financial results, the company was able to generate incredible revenue growth of almost 31%, more than 3 times the industry average of 9.6%.
- Analysts’ consensus estimates for 3rd quarter earnings per share are projecting earnings to grow 31% over the year ago quarter to 51 cents per share.
- TripAdvisor took a big step toward expanding its business operations through its acquisitions of LaFourchette and Vacation Home Rentals.
- The company has several other future growth prospects lined up such as the inclusion of business listings via TripConnect and enhancing global outreach to the Far East.
Is TripAdvisor Attractive After A Year Of Consolidation?
- Large drop in the stock of TripAdvisor over the last two months makes the stock attractive.
- New initiatives are leading to solid 30% revenue growth and future upside potential.
- Short-term fears over travel reductions due to Ebola will give way to the benefits of lower oil prices.
- TripAdvisor’s deal with Travel port provided its users with access to a broader range of hotel properties and bookings without leaving the website.
- The acquisition of Viator enhanced TripAdvisor’s bookable tours by 20,000 and added 600,000 reviews, photos and videos.
- Mobile or smart device apps account for 49% of the company’s total online traffic.
TripAdvisor: Worthwhile Investment For Growth Investors
- Online travel booking has shown tremendous growth over the years backed by the rapid adoption of smartphones and tablets along with facilitated internet access.
- TripAdvisor experienced strong financial growth over the last few years.
- With its strategic acquisitions, the company is all set to cater to the rising travel demand.
- TripAdvisor has continued with its strong revenue growth in the current fiscal year. Second quarter revenue growth clocked in at 31% year-on-year, or $323 million.
- TripAdvisor got 73% of its overall revenue during the second quarter from click-based advertising, and 13% from display-based advertising. The rest of the company’s revenue comes mainly from subscriptions.
- TripAdvisor is lucky in this respect because it’s able to leverage the high-margins revenue it receives from Priceline and Expedia to cover its marketing costs.
TripAdvisor: Eyeballs Growth, Can't Justify The Valuation
At Current Levels, Shares Of TripAdvisor Are Priced For Perfection
- Shares of TripAdvisor have risen nearly 150% over the past 2 years.
- TripAdvisor accounts for more than 10% of all global traffic to travel websites.
- Several catalysts exist, but fair value is approximately 15% lower from the current prices.
TripAdvisor Enters Online Restaurant Reservation Space With Acquisition Of LaFourchetteTrefis • May. 29, 2014
- TripAdvisor is the world’s largest travel review website and averages more than 250 million unique visitors in a month.
- In a move to attract more users and better monetize its restaurant traffic it acquired LaFourchette this month for $140 million in an all cash deal.
- TripAdvisor has a history of acquiring startups, such as SeatGuru, Jetsetter and Niumba, and integrating their services with its own.
TripAdvisor Posts Strong Results On Meta Improvements, Ups Guidance
- The company's click-based advertising revenue increased by 16% year-on-year and accounted for 74% of total revenues in Q1.
- Better quality leads have allowed TripAdvisor to increase its advertising rates.
- The company's instant booking feature is expected to reach 100% of smartphone users in its most important markets by the end of this quarter.
Subscription Growth Story Still Intact For TripAdvisor
Fri, Jan. 9, 11:33 AM
- Liberty Media (LMCA -1.3%) CEO Greg Maffei has been given more voting control of TripAdvisor (TRIP +0.7%), according to a new SEC filing.
- Maffei gained through an asset swap 2.8M B shares (10 votes per share) of Liberty TripAdvisor held by John Malone.
- Liberty TripAdvisor in turn has majority voting control of TripAdvisor.
- SEC Form 13D
Thu, Jan. 8, 11:11 AM
Thu, Jan. 8, 9:59 AM
- Believing "the best days for shares may be behind it," Stifel's Scott Devitt has downgraded Google (GOOG -1.4%) to Hold. "Google is in the early to mid stages of a core business maturation. The company continues to find growth outside of search, but in structurally lower-margin business [segments] such as Google Play and YouTube."
- Devitt adds Google will face stiff competition as it further expands into vertical search categories such as travel, local, and e-commerce - some of those efforts have been faring well - and echoes other analysts in arguing Facebook's growing share of digital ad spend poses a threat.
- Devitt has also downgraded Priceline (PCLN -1.3%) to Hold, citing concerns about forex - the impact of a weak euro is already well-known - high marketing spend, and growing competition. "The online travel market continues to benefit from secular tailwinds such as mobile adoption, but we believe that shifts in the competitive landscape and macro headwinds warrant a moderate 2015 outlook."
- TripAdvisor (TRIP +0.4%) has been cut to Hold due to worries about delayed booking service launches and higher marketing spend, as well as growth concerns about TripAdvisor's core metasearch service (previous).
- Google, Priceline and TripAdvisor were already fairly close to their 52-week lows going into today. Google and Priceline both now trade for 17x 2015E EPS. Their 2015 revenue growth consensus estimates are respectively at 19% and 17%.
Dec. 5, 2014, 7:06 PM
- Priceline (NASDAQ:PCLN) and Expedia (NASDAQ:EXPE) have made their hotel inventory available for in-app bookings through Priceline-owned Kayak and travel startup Top10's app. However, they refuse to do the same for the Instant Bookings feature within TripAdvisor's (NASDAQ:TRIP) mobile apps.
- Priceline and Expedia's stance highlights the tension between the companies and TripAdvisor. While TripAdvisor drives plenty of traffic to both companies' sites (in exchange for referral fees) through its metasearch platform, it also does so for many rival sites, and (like Google) acts as an alternative to directly using Priceline and Expeida's platforms.
- TripAdvisor's click-based ad revenue (metasearch-driven) rose 31% Y/Y in Q3 to $247M. It's expected to grow at a mid-20s to high-20s clip for the whole of 2014.
Dec. 2, 2014, 1:25 PM
Nov. 5, 2014, 10:08 AM
- In addition to missing Q3 EPS estimates (while beating on revenue), TripAdvisor (NASDAQ:TRIP) used its CC (transcript) to lower its full-year adjusted EBITDA growth forecast to the low-20s range. Three months ago, the company forecast adjusted EBITDA growth would be at the low end of a prior high-20s to low-30s range (that also didn't go over well).
- In addition, guidance for 2014 click-based (search-driven) revenue growth has been lowered to the mid-20s from the high-20s. TripAdvisor notes ad clicks are being affected by "hotel shopper seasonality."
- Subscription/transaction/other guidance has been raised to the low-80s from the high-60, and display ad growth is still forecast to be in the mid-to-high teens; acquisitions are giving a lift to the former. Total revenue growth is still expected to be in the high-20s to low-30s; consensus is at 31.5%.
- Heavy spending is partly responsible for the EBITDA guidance cut: GAAP costs/expenses rose 58% Y/Y to $270M, with sales/marketing spend rising 64% to $159M. TripAdvisor has ramped spending for both online ads (similar to peers) and a TV ad campaign, and says it's "leveraging [its] very large and profitable hotel business to capture market share in attractions."
- Q3 click-based ad revenue +31% Y/Y to $247M; display ads +13% to $35M; subscription/transaction/other +106% to $72M.
- BofA/Merrill and Pac Crest have downgraded, and several firms have cut their targets.
- Q3 results, PR (.pdf)
Nov. 5, 2014, 9:16 AM
- Gainers: CRTO +19%. JIVE +17%. YOD +16%. TTPH +12%. IBIO +11%. AEZS +9%. EXEL +8%. CLNY +7%. ANR +7%. ROYT +7%. EOG +6%. PHMD +6%. NICE +6%. VPCO +6%. ATVI +5%. VG +5%. CTSH +5%. WLT +5%. MACK +5%.
- Losers: CHUY -24%. NUS -22%. FEYE -16%. ZU -14%. TRIP -13%. SSYS -8%. MEMP -7%. NG -6%. ANV -6%. ARIA -6%. AWAY -6%.
Nov. 4, 2014, 4:14 PM
Nov. 4, 2014, 8:51 AM
- Priceline (NASDAQ:PCLN) beat Q3 EPS estimates and posted in-line revenue, but offered EPS guidance that was well below consensus and noted macro conditions are mixed, especially in Europe. Revenue guidance (11%-18% Y/Y growth vs. a 23.8% consensus) is also light.
- The online travel giant also reported bookings growth slowed to 28% in Q3 from 34% in Q2 - U.S. bookings growth fell to 9.9% from 20.6%, and international growth to 31.6% from 36.2% - and guided for just 8%-15% Q4 bookings growth. Forex (driven by a weak euro) is expected to have a 500 bps impact on Q4 growth.
- While Priceline has a history of guiding conservatively, the size of the guidance shortfalls is raising eyebrows. Expedia (NASDAQ:EXPE) -1.2% premarket, TripAdvisor (NASDAQ:TRIP) -0.8%. TripAdvisor reports after the bell.
Oct. 31, 2014, 1:42 PM
- Expedia (EXPE +5%) is rallying after beating Q3 estimates on the back of a 29% Y/Y increase in gross bookings (even with Q2's clip) to $13.5B. U.S. bookings rose 35% to $7.9B, and international bookings 22% to $5.6B.
- Hotel room nights rose 24% Y/Y (down from Q2's 28%), and air tickets 30% (up from Q2's 28%). Revenue per room night fell 2%; revenue per ticket fell 7%.
- Sales/marketing spend (much of it on Google) rose 30% to $815.8M, and tech/content spend 20% to $172.8M. $130M was spent on buybacks.
- On the CC (transcript), the company reiterated guidance for 16%-19% full-year adjusted EBITDA growth. CEO Dara Khosrowshahi noted the Travelocity deal is boosting top-line performance, and said the company plans to increase investments in its Chinese eLong (LONG -0.5%) unit, which is facing "challenges and competitive headwinds."
- With marketing spend remaining high and investments in eLong and Trivago ramping, Benchmark expects "minimal EBITDA margin expansion" in 2015. But it also expects 13% sales growth after the Travelocity deal reaches its 1-year anniversary.
- Priceline (PCLN +4.6%) and TripAdvisor (TRIP +2.8%) are getting a lift from Expedia. The Nasdaq is up 1.3%.
Sep. 22, 2014, 11:35 AM
- TripAdvisor's (TRIP -4.7%) Viator unit has informed 1.4M customers their credit/debit card data, e-mail addresses, and other info may have been compromised by a data breach.
- 880K of the customers may have had payment data compromised. Viator says it was first informed of "unauthorized charges" on customers' credit cards on Sep. 2. Home Depot, Target, and many other companies can sympathize.
- TripAdvisor says its core site was unaffected by the breach. In July, the acquisition-hungry company agreed to pay $200M (mostly in cash) to buy Viator, a provider of handpicked packaged tours and related reviews.
Sep. 5, 2014, 7:31 AM
- Citing competitive concerns thanks to Google, Evercore pulls its Overweight rating on Priceline (NASDAQ:PCLN), and lowers the price target to $1,350 from $1,450.
- The team pulls its Underweight rating on Tripadvisor (NASDAQ:TRIP), upgrading to Equal-weight and lifting the price target to $110 from $85.
- PCLN -0.9% premarket
Aug. 27, 2014, 6:36 PM
- Liberty Interactive (NASDAQ:LINTA) has finished spinning off its 22% TripAdvisor (NASDAQ:TRIP) stake into a new company called TripAdvisor Holdings. Starting tomorrow, TripAdvisor Holdings will trade under the symbols LTRPA and LTRPB.
- Liberty's stake carries with it 57% of TripAdvisor's voting rights. Wunderlich recently argued TripAdvisor might eventually buy back the stake in a cash/stock deal.
Aug. 25, 2014, 2:32 PM
- Wunderlich's Blake Harper has hiked his TripAdvisor (TRIP +1.5%) target by $12 to $100, albeit while reiterating a Hold.
- Harper cites a recent update to TripAdvisor's Hotel Listings page that he expects will yield "a better user experience and better monetization," the acquisition of local tours/activities site Viator, and a partnership with fast-growing car service Uber.
- He's also positive on Liberty Interactive's (LINTA -0.2%) plans to spin off its 22% TripAdvisor stake (comes with 57% voting rights) into a new holding company, and sees the move as "a precursor to an eventual combination that enables TRIP to consolidate the voting control in a cash/stock deal."
Jul. 24, 2014, 10:14 AM
- TripAdvisor's (TRIP -10.7%) sales/marketing spend rose 53% Y/Y in Q2 to $127M, outpacing revenue growth of 31% and contributing to an EPS miss. The company mentioned on its CC (transcript) it spent $10M on a TV ad campaign that started in May.
- In addition, due to "incremental investments" in both its hotel ops and its new restaurant booking ops (LaFourchette), TripAdvisor now expects full-year adjusted EBITDA growth to be at the low end of a prior high-20s to low-30s guidance range. Guidance for high-20s to low-30s revenue growth is reiterated.
- Click-based revenue (73% of total revenue) rose 28% Y/Y in Q2, a pickup from Q1's 16% growth. Display ad revenue rose 19% vs. 16% in Q1, and subscription, transaction & other revenue rose 55% vs. 62%. Monthly unique users rose 25% to 280M.
- North American sales (50% of total) +20% Y/Y, EMEA +47%, Asia-Pac +40%, Latin America +30%. Adjusted EBITDA margin fell to 40% from 46% a year ago.
- Shares were up 30% in 2014 going into the report. Cantor has downgraded them to Hold.
- Q2 results, PR (.pdf)
Jul. 24, 2014, 9:18 AM
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