TripAdvisor Inc. (TRIP) faced challenges in 2020 and early 2021 from the negative impact that the coronavirus pandemic has had on the travel and tourism industries. However, despite the rocky road traveled, TripAdvisor saw positive momentum in recent months, outperforming the S&P 500. Since the beginning of 2020, the stock has gained approximately 70.1% compared to the S&P’s gain of about 16.6%.
The online travel company is estimated to have the world’s largest travel site. It offers features to customers such as a mobile application and a website with comparison shopping and user-generated reviews to aid travelers in planning. TripAdvisor also enables consumers to make online hotel reservations, book transportation rentals and restaurant reservations, and reserve travel experiences. TripAdvisor also offers tools for businesses to customize their listings, respond to reviews, and track performance.
Much like its competitors, TripAdvisor has faced the stinging wrath of the coronavirus pandemic on business. Government travel restrictions, lockdowns, and stay-at-home advisories resulted in travel cancellations and delayed much of the public from making future vacation and business travel plans. Fortunately, TripAdvisor saw recent growth and appears to be climbing in a positive direction.
Hedge Funds Are Buying
Hedge funds were active in the fourth quarter. The aggregate 13F shares held rose to about 43.6 million from 43.4 million, a slight increase of approximately 0.4%. Reviewing hedge fund activity, 33 created new positions, 17 added to an existing stake, 14 exited, and 21 reduced their holdings. Institutions were also buying and increased their aggregate holdings by about 4.8%, to approximately 97.0 million from 92.5 million.
Encouraging Multi-year Estimates
Analysts expect to see revenue rise over the next four years, with increases in growth from 2021 to 2024, bringing revenue up to $1.7 billion, up from an estimated $871.2 million in 2021. Year-over-year estimated increases could also bring earnings to $2.66 per share in 2024, up from $0.13 for 2021.
Citigroup, Inc. is optimistic about TripAdvisor’s new Plus subscription product, as it could potentially bring in approximately $1 billion in revenue from subscriptions. The new paid subscription program offers individuals the chance to be members of the program, with access to unique travel benefits and discounts to improve their overall travel experience. As a result, Citigroup upgraded TripAdvisor’s rating to a Buy from Neutral and raised its price target to $62.
Truist Financial Corp. selected TripAdvisor as one of its top picks due to an expected rebound in leisure travel. While the pandemic is still a factor, the rising pace of coronavirus vaccine distribution is triggering a returning consumer appetite for travel.
It appears that a promising future lies ahead for TripAdvisor, as the company emerges from the cloud of the pandemic and continues forward with positive momentum. With optimistic estimates from analysts and investment firms and ownership increases by institutions and hedge funds, other investors may be encouraged to acquire shares.