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. 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%.
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.
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
Jul. 23, 2014, 5:41 PM
Jul. 14, 2014, 10:03 AM
- Aruba (ARUN +1.2%) has been upgraded to Outperform by Macquarie. Shares rallied on Friday after the FCC cleared a $2B school Wi-Fi initiative.
- China Mobile (CHL +2.7%) has been upgraded to Buy by BofA/Merrill.
- Informatica (INFA +1.2%) has been upgraded to Overweight by Evercore ahead of its July 24 Q2 report.
- TripAdvisor (TRIP -1.5%) has been cut to Neutral by Nomura ahead of its July 23 Q2 report.
- Teradata (TDC +1.5%) has been started at Buy by Standpoint Research. Q2 results are due on Aug. 7.
- Jumei (JMEI +2.7%) has been started at Buy by BofA/Merrill.
- MTS Systems (MTSC +1.4%) has been started at Buy by Needham.
Jun. 13, 2014, 2:31 PM
- Priceline's (PCLN -2.8%) market cap has fallen by $1.6B since announcing a $2.6B deal to buy restaurant reservation leader OpenTable.
- With shares of many other local services firms following OpenTable higher - Yelp is up 13.8% - the Street is betting Priceline's move will spark further M&A activity, with some of it possibly coming from Priceline.
- "We see this deal as likely part of Priceline's move into offering a much broader range of local e-commerce services to what is a very attractive customer set," writes RBC (Outperform).
- OpenTable's platform supports 31K+ restaurants and seats 15M+ diners/month. The company towers over the U.S. market, but is seeing growing competition from Yelp, TripAdvisor (TRIP - just bought European leader LaFourchette), Groupon, and other firms going after restaurants unhappy with OpenTable's pricing.
- In spite of the steep price tag - Priceline is paying 9.9x 2015E sales - analyst commentary is mostly positive. Not surprisingly, much of it centers around cross-selling opportunities between OpenTable and Priceline's travel bookings offerings.
Jun. 13, 2014, 9:18 AM
- YELP +9.4% premarket, Groupon (GRPN) +7.1%, Pandora (P) +3.5%, Angie's List (ANGI) +4.7%, TripAdvisor (TRIP) +3%, and Zynga (ZNGA) +2.3% after Priceline announces it's buying OpenTable for $2.6B (a 46% premium to yesterday's close).
- OpenTable (OPEN), meanwhile, is up to $104.18 - $1.18 above Priceline's acquisition price - as investors bet a higher offer (perhaps from Google, eBay, or Amazon?) will arrive.
- The deal is the largest acquisition of a public U.S. Internet company in recent history.
May. 7, 2014, 3:23 PM
- 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.
Apr. 25, 2014, 5:39 PM
Feb. 28, 2014, 9:51 AM
- Baidu (BIDU -2.1%) has been cut to Reduce by BNP Paribas a day after gaining in response to a Q4 beat and strong top-line guidance.
- TripAdvisor (TRIP +3%) has been upgraded to Neutral by Susquehanna.
- RadiSys (RSYS +9.5%) has been upgraded to Buy by Needham.
- YuMe (YUME -18.3%) has been cut to Neutral by Citi after providing soft guidance (2014 revenue of $190M-$200M vs. a $203.7M consensus) to go with mixed Q4 results.
Feb. 12, 2014, 12:03 PM
- TripAdvisor (TRIP +8.3%) is making new highs after beating Q4 revenue estimates and providing strong guidance on its CC (transcript). The travel reviews leader said it expects 2014 revenue growth to be in the mid-20s range (consensus is at 21.9%), and for EBITDA to grow at a similar clip.
- TripAdvisor expects click-based (CPC) ad sales to show accelerating growth in 2014, with full-year growth in the low-20s range. Display ad sales (CPM-based) are expected to grow at a high-teens rate, and all other businesses (subscriptions, transactions, etc.) are expected to collectively grow in the low-50s range.
- CPC ad sales made up 68% of Q4 revenue, display ads 15%, and all other businesses 17%. North American sales (51% of revenue) rose 22%, EMEA 30%, and Asia-Pac 40%. Latin America was flat.
- Mobile's share of TripAdvisor traffic doubled to 40% in 2013, and app downloads rose nearly 150% to 82M. Travel listings rose 80% to 550K, and business listing subs 38% to 69K.
- Priceline (PCLN +2.5%) and Expedia (EXPE +1.1%), both major TripAdvisor clients, are also trading higher. Expedia took off last week following a Q4 beat. Priceline, which launched an updated Android app this morning, reports on Feb. 20.
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