Tripadvisor Surpasses Earnings Estimates, Yet Analysts Warn of Challenges Ahead

Tripadvisor Inc. TRIP reported strong earnings for the fourth quarter on Thursday, achieving earnings per share of $0.30—42.86% above the $0.21 estimate. Revenue reached $411 million, exceeding forecasts by 2.75%.

JPMorgan Predicts Challenges Despite Strong Q4 Performance

Even with impressive earnings, analyst Doug Anmuth from JPMorgan maintains an Underweight rating on the stock. He cites several obstacles ahead for Tripadvisor. Anmuth highlighted, “Holiday timing, tough comps, & FX weigh on 1Q guide,” while management anticipates growth in 2025 to be “back-half weighted” due to challenging pricing comparisons in the first half. He noted that a recovery could be on the horizon for 2026, with an “acceleration expected across top & bottom lines.”

Transformation Essential for Long-Term Success

Tripadvisor’s platforms for experiences and dining, Viator and TheFork, are showing growth; however, the core brand’s shift from hotel meta-search to broader travel planning is impacting earnings. Anmuth stated, “Brand Tripadvisor’s transformation…remains in its early days and is weighing on revenue and Adj. EBITDA growth in the near term.”

The management team forecasts a revenue growth of 5%-7% for 2025, yet expects adjusted EBITDA margins to decrease by approximately 50 basis points at the high end. The merger with Liberty Tripadvisor Holdings is still poised for completion in the second quarter. Despite this, Anmuth has revised EBITDA projections for 2025 and 2026 down by 5% and 7%, respectively, and maintains a price target of $15.

Market Indicators Reflect Uncertainty

Currently, TRIP stock appears to be in moderately bearish territory. The stock is trading at $16.50, which is below both its eight-day and 20-day simple moving averages at $17.66, signaling bearish conditions. In contrast, the 50-day and 200-day SMAs, resting at $15.79 and $16.04, indicate a bullish sentiment.

The MACD (moving average convergence/divergence) shows a positive reading of 0.43, suggesting some bullish sentiment, while the RSI (relative strength index) sits at 44.01, indicating neutral sentiment.

In summary, although Tripadvisor’s fourth-quarter results showed resilience, the company faces near-term challenges and margin pressures, keeping JPMorgan cautious for now. With the stock trading below important averages and growth expected to be back-loaded in 2025, prospective investors may need to adopt a wait-and-see approach.

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Photo by Tero Vesalainen via Shutterstock.