How trivago Is A Value Trap

Kenio Fontes
861 Followers

Summary

  • Trivago's business model lacks a competitive moat and is being squeezed by dominant players like Booking, Airbnb, and Alphabet.
  • Despite recent initiatives and improved conversion rates, Trivago's revenue and margins remain under significant pressure, reflecting a declining business.
  • The stock appears cheap on paper, but ongoing losses, high ad dependence, and weak network effects make it a potential value trap.
  • Given the high risks and limited turnaround prospects, I rate TRVG as a sell despite its low market cap and cash reserves.

The Trivago headquarters in the Medienhafen in Düsseldorf.

We-Ge/iStock Unreleased via Getty Images

I believe that many people have already been impacted by marketing from Trivago (NASDAQ:TRVG) with the famous slogan "Hotel? Trivago". It's easy to understand what they do, it's a very simple business model. They propose to be a

This article was written by

861 Followers
Equity Research Analyst with a broad career in the financial market, covered both Brazilian and global stocks. As a value investor, my analysis is primarily fundamental, focusing on identifying undervalued stocks with growth potential. Feel free to reach out for collaborations or to connect!

Analyst’s Disclosure:I/we have a beneficial long position in the shares of GOOGL either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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