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TripAdvisor stock target cut, retains hold rating on updated financial metrics

EditorNatashya Angelica
Published 30/05/2024, 18:00

On Thursday, Truist Securities adjusted its outlook on TripAdvisor (NASDAQ:TRIP) shares, reducing the price target to $21 from the previous $28 while maintaining a Hold rating on the stock. The revised price target reflects a change in the valuation multiple and earnings projections for the upcoming years.

The firm's analyst has modified the 2024 adjusted EBITDA estimate to $352 million, a decrease from the earlier forecast of $412 million. Moreover, the earnings per share (EPS) estimate for the same year has been revised downward to $0.48 from the prior estimate of $1.19. Looking ahead to 2025, the adjusted EBITDA projection has been altered to $395 million from the former $442 million estimate, with EPS expectations adjusted to $1.08 from $1.35.

Truist Securities also introduced a 2026 adjusted EBITDA estimate of $424 million and an EPS forecast of $1.14. The new price target of $21 is based on a blended 9.0x sum-of-the-parts multiple, which is a decrease from the previously used 10.5x multiple. Furthermore, the time value of money (TVM) discount has been set at 0%, a shift from the previous 5% discount.

TripAdvisor's stock is currently trading at multiples of 16.6x and 15.7x Truist Securities' 2024 and 2025 adjusted EBITDA estimates, respectively. The updated financial metrics reflect the firm's latest expectations for TripAdvisor's performance in the coming years.

InvestingPro Insights

In light of Truist Securities' revised outlook on TripAdvisor, it's worth noting some key metrics and insights from InvestingPro that could provide additional context for investors. TripAdvisor's market capitalization stands at approximately $2.5 billion, with a forward-looking P/E ratio based on last twelve months as of Q1 2024 at 54.05. This valuation comes as the company demonstrates a gross profit margin of an impressive 91.45%, indicating strong profitability in its operational model.

InvestingPro Tips suggest that TripAdvisor holds more cash than debt, which may offer a degree of financial stability. Moreover, despite the stock's recent volatility and price declines, with a 3-month price total return of -33.15%, analysts predict the company will be profitable this year. These factors could be particularly relevant for investors considering the company's future amidst the revised earnings estimates.

For those looking to delve deeper into TripAdvisor's financial health and stock performance, there are over 10 additional InvestingPro Tips available, which can be accessed by visiting the dedicated page for TripAdvisor on Investing.com. Moreover, users can take advantage of a special offer using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking further insights and analysis that could aid in making more informed investment decisions.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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