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Online Travel Stocks: TripAdvisor, Clear Secure, and Vacasa β€” Analyst’s Insights on Growth and Market Outlook

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According to Goldman Sachs analyst Benjamin Miller, it’s time to take a closer look at online travel stocks. As the industry moves beyond the pent-up demand post-pandemic and adjusts to a new normal, Miller explores the structural growth outlook for online travel and its implications for customer acquisition, marketing costs, and overall demand within the travel ecosystem.

Miller’s Coverage Initiation:

Miller has initiated coverage on three key players in the online travel market:

  • TripAdvisor Inc (NASDAQ: TRIP) – Buy rating, price target: $22
  • Clear Secure Inc (NYSE: YOU) – Buy rating, price target: $24
  • Vacasa Inc (NASDAQ: VCSA) – Neutral rating, price target: $11

Insights on TripAdvisor:

Miller believes that the growth profile of TripAdvisor is evolving as metasearch gives way to lower funnel businesses, particularly Experiences through Viator. With faster revenue growth at Viator, Experiences, and increased scale and operating efficiencies, Miller sees an upside to Street estimates for revenue and profitability. Additionally, he highlights the potential catalyst of unlocking Viator’s asset value.

Clear Secure as a Quality Growth Technology Asset:

Miller sees Clear Secure as a high-quality growth technology asset, projecting a growth rate of around 15-20% over the medium term. He anticipates revenue and EBITDA to exceed estimates due to significant subscriber additions and retention, which will drive scalability against its cost base. The business’s healthy FCF generation also leaves room for additional returns to shareholders.

Vacasa’s Position in the Alternative Accommodations Market:

Miller views Vacasa as well-positioned to benefit from the secular tailwinds in the alternative accommodations/vacation rental market. As the demand for alternative accommodations continues to grow, Vacasa has a solid runway for growth. Miller looks forward to gaining better visibility into the normalization of demand trends in Vacasa’s core markets, particularly as urban and international travel resume.

Price Actions:

After the coverage initiation, TripAdvisor shares saw a 1.29% increase, trading at $16.50. Clear Secure shares experienced a 6.29% increase, trading at $18.42. On the other hand, Vacasa shares saw a slight decline of 0.33%, trading at $9.17 at the time of publication.

Overall, Miller’s analysis provides valuable insights into the structural growth prospects of these online travel companies, highlighting potential catalysts and market advantages. Investors and traders looking for comprehensive market analysis should consider these factors while assessing investment opportunities in the online travel industry.

Photo by Shutterstock

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