4 Jan

TripAdvisor’s Top and Bottom Line: Analysts’ Expectations

WRITTEN BY Andrew Brunton FEATURED IN Company News, Insights, & Analysis and Consumer Discretionary

Analysts’ expectations

Wall Street analysts expect TripAdvisor’s (TRIP) fourth-quarter results to benefit from the healthy travel demand environment. Better-than-expected bottom-line results for three consecutive quarters increased analysts’ confidence in the stock.

Analysts expect the fourth-quarter revenues to increase 6.9% YoY to $343.1 million. Segment-wise, the hotel and non-hotel revenues are expected to increase 1.8% and 25.7%, respectively, to $248.3 million and $96.8 million.

TripAdvisor’s Top and Bottom Line: Analysts’ Expectations

The company also expects YoY growth in its consolidated, hotel, and non-hotel revenues in the fourth quarter. For 2018, the sales will likely increase 4.1% YoY to $1.61 billion due to a 24.7% growth expected in the Non-Hotel segment. The growth is expected to be partially offset by a 2.7% decline in the Hotel segment.

EBITDA estimates

For the fourth quarter, TripAdvisor’s adjusted EBITDA is expected to grow 27% YoY to $80 million. The adjusted EBITDA margin is expected to improve by 370 basis points to 23.3%. Segment-wise, the hotel and non-hotel adjusted EBITDA are expected to be $67.4 million and $8.2 million.

For 2018, analysts expect TripAdvisor’s adjusted EBITDA to increase 25% YoY to $413.7 million. Analysts’ projections are in-line with the company’s mid-twenties percent range growth expectations. Analysts’ 2018 EBITDA estimates depict margin expansion of 440 basis points to 25.7%.

Earnings estimate

The non-GAAP EPS is expected to increase five-fold to $0.30 in the fourth quarter from $0.06 reported in the fourth quarter of 2017. For 2018, the non-GAAP EPS is expected to rise ~68% YoY to $1.71.

Booking Holdings (BKNG), Expedia Group (EXPE), and Ctrip.com International (CTRP) are projected to report growth of 16.4%, 30%, and 21.9% YoY, respectively, in their 2018 EPS.

Investors could gain exposure to TripAdvisor by investing in the SPDR S&P Internet ETF (XWEB), which has allocated 2.3% of its funds in the stock.

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