After an 11% decline year-to-date, at the current price of around $16 per share, we believe Tripadvisor’s stock (NASDAQ
NDAQ
Interestingly, Tripadvisor’s stock had a Sharpe Ratio of -0.1 since early 2017, which is much lower than the figure of 0.6 for the S&P 500 Index over the same period. Compare this with the Sharpe of 1.2 for the Trefis Reinforced Value portfolio. Sharpe is a measure of return per unit of risk, and high-performance portfolios can provide the best of both worlds.
Tripadvisor’s sales shot higher in the fiscal first half as compared to pandemic-pressured results a year ago. The company’s revenues rose 27% year-over-year (y-o-y) to $865 million. The Viator segment delivered a particularly strong performance as revenue grew a robust 72% y-o-y to $331 million. Yet the business wasn’t able to profit from that higher revenue base. In the first six months of 2023, the travel platform posted a negative $0.35 in diluted earnings per share compared to a negative 2 cents in the same period a year ago. The company spent aggressively on marketing and technology development, especially in the Viator and core Tripadvisor platforms.
We have revised Tripadvisor’s valuation to $18 per share, based on a $1.04 expected EPS and a 17.0x P/E multiple for the fiscal year 2023 – almost 14% higher than the current market price. We forecast Tripadvisor’s Revenues to be $1.7 billion for the fiscal year 2023, up 16% y-o-y.
It is also helpful to see how its peers stack up. Check out how Tripadvisor’s Peers fare on metrics that matter. You will find other valuable comparisons for companies across industries at Peer Comparisons.
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