TripAdvisor reported non-GAAP fourth-quarter 2023 earnings of 38 cents per share, beating the Zacks Consensus Estimate by 72.7%. The bottom line significantly jumped from the prior-year quarter’s figure of 7 cents. Revenues of $390 million increased 10% year over year and surpassed the Zacks Consensus Estimate of $372.9 million. Top-line growth was driven by strong momentum in the Viator segment. A well-performing TheFork segment also benefited the company. However, weakness in hotel meta offerings in Europe was a concern. TripAdvisor has gained 12.2% in the past year, underperforming the industry’s rally of 40%.
Performance Comparison
TripAdvisor, Inc. price-consensus-eps-surprise-chart | TripAdvisor, Inc. Quote
Quarterly Breakdown
TripAdvisor reports revenues under three segments: Tripadvisor Core, Viator, and TheFork.
Tripadvisor Core: Revenues summed $218 million (55.9% of revenues), up 0.5% year over year, Media and advertising revenues jumped 6% year over year to $35 million.
Revenues from Tripadvisor experiences and dining were $38 million, increasing 12% year over year. Other revenues within the segment were $10 million which remained flat year over year. However, revenues from Tripadvisor-branded hotels decreased 4% year over year to $135 million due to a decline in European hotel meta offering.
Viator: Revenues totaled $161 million (41.3%), increasing 27% year over year.
TheFork: Revenues came in at $39 million (10%), increasing 18% year over year.
Operational Efficiency
TripAdvisor’s selling and marketing costs decreased 7.7% year over year to $179 million.
General and administrative costs were down 18.9% from the year-ago quarter’s level to $47 million. Technology and content costs of $68 million increased 13.4% on a year-over-year basis. TRIP reported operating income of $31 million in the reported quarter against $13 million of operating loss in the year-ago quarter. In the reported quarter, the total adjusted EBITDA margin was 21.5%, which expanded 940 bps on a year-over-year basis.
Financial Position & Investor Perspective
As of Dec 31, 2023, cash and cash equivalents were $1.07 billion compared with $1.12 billion as of Sep 30, 2023. Long-term debt stood at $839 million at the end of the fourth quarter, which remained flat compared with the previous quarter’s figure. TripAdvisor used $19 million of cash in operations in the reported quarter against $14 million of cash generated from operations in the prior quarter. Free cash outflow was $35 million in the fourth quarter.
Zacks Rank & Stocks to Consider
Currently, TripAdvisor carries a Zacks Rank #3 (Hold). Investors interested in the broader retail-wholesale sector may consider some better-ranked stocks like
Amazon (AMZN), Fastenal (FAST), and Target (TGT). While Amazon sports a Zacks Rank #1 (Strong Buy), Fastenal, and Target carry a Zacks Rank #2 (Buy), each, at present.
Shares of Amazon have gained 72.9% in a year. The long-term earnings growth rate for AMZN is currently projected at 28.13%.
Shares of Fastenal have risen 36.9% in a year. The long-term earnings growth rate for FAST is currently pegged at 9%.
Shares of Target have gained 14.7% in a year. The long-term earnings growth rate for TGT is currently anticipated at 14.18%.
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