Is Tripadvisor Poised for a Financial Comeback?

Updated On: May 7, 2025 3:21 am

Tripadvisor Forecasts Diminished Earnings Amid Strategic Shifts

Tripadvisor Stock (NASDAQ: TRIP) is set to publish its fiscal first-quarter earnings on Wednesday, May 7, 2025. Analysts estimate earnings of 5 cents per share, with anticipated revenues of $388 million. These figures reflect a significant 58% year-over-year reduction in adjusted earnings and a slight 2% decline in sales from the previous year’s results, which were 12 cents per share and $395 million in revenue. Historically, Tripadvisor stock tends to underperform post-earnings announcements, having declined 70% of the time, with a median drop of 7.7% on the first trading day and a maximum decline recorded at 29%.

Company Performance and Future Expectations

The company is focusing on its Experiences segment, where both Viator and TheFork are showing promising results. Conversely, the Brand Tripadvisor segment is experiencing a decline, affected by pressures on its conventional business model. Looking ahead, Tripadvisor expects to maintain growth in the Viator segment, predicting mid to high-teens expansion in booking volume. TheFork is also projected to generate low double-digit revenue growth. However, the Brand Tripadvisor segment may face a slight revenue decline in low single digits.

Currently, Tripadvisor boasts a market capitalization of $1.9 billion. Over the last year, it achieved $1.8 billion in revenue while maintaining operational profitability, showing an operating income of $92 million and a GAAP net income of $5 million.

Strategies for Event-Driven Traders

Traders focusing on event-driven strategies might find historical patterns beneficial, whether positioning themselves ahead of earnings or reacting to post-release movements. For those looking for lower volatility than single stocks, the Trefis High Quality portfolio has outperformed the S&P 500, returning more than 91% since inception. See earnings reaction history of all stocks.

Historical Odds of Post-Earnings Returns

Analyzing one-day (1D) post-earnings returns reveals:

Out of 20 earnings data points collected over the past five years, there were 6 positives and 14 negatives concerning 1D returns. This results in positive returns occurring about 30% of the time.
When narrowed to the last three years, this percentage improves to 36%.
The median of the 6 positive returns sits at 7.2%, while the median of the 14 negative returns stands at -7.7%.

5-day (5D) and 21-day (21D) returns statistics are further summarized in the table below.

Understanding Correlations in Historical Returns

Implementing a relatively less risky strategy involves understanding the correlation between short-term and medium-term returns following earnings. Traders can benefit by identifying pairings with the highest correlation and executing appropriate trades. For instance, if there is a strong correlation between 1D and 5D returns, a trader might go “long” for the next 5 days if the 1D return is positive. Here is the correlation data based on 5-year and the more recent 3-year history.

TRIP Correlation Between 1D, 5D and 21D Historical Returns

Impact of Peer Earnings on Stock Reactions

The performance of peers can also influence reactions to post-earnings Stock. In some cases, the market begins to price in these shifts before earnings reports are released. Here is historical data showcasing the post-earnings performance of Tripadvisor Stock in relation to peers that reported earnings just before Tripadvisor.’