Critical Analysis: TripAdvisor (TRIP) versus Its Competitors
TripAdvisor (NASDAQ: TRIP) is one of 11 public companies in the “Travel Agents” industry, but how does it compare to its peers? We will compare TripAdvisor to similar businesses based on the strength of its analyst recommendations, profitability, valuation, institutional ownership, earnings, risk and dividends.
Volatility & Risk
TripAdvisor has a beta of 2.33, suggesting that its stock price is 133% more volatile than the S&P 500. Comparatively, TripAdvisor’s peers have a beta of 1.21, suggesting that their average stock price is 21% more volatile than the S&P 500.
This table compares TripAdvisor and its peers’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Earnings and Valuation
This table compares TripAdvisor and its peers top-line revenue, earnings per share and valuation.
|Gross Revenue||NetIncome||Price/Earnings Ratio|
|TripAdvisor||$1.48 billion||$120.00 million||72.70|
|TripAdvisor Competitors||$3.16 billion||$214.58 million||10.89|
TripAdvisor’s peers have higher revenue and earnings than TripAdvisor. TripAdvisor is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.
Institutional and Insider Ownership
90.3% of TripAdvisor shares are owned by institutional investors. Comparatively, 75.8% of shares of all “Travel Agents” companies are owned by institutional investors. 1.1% of TripAdvisor shares are owned by company insiders. Comparatively, 14.5% of shares of all “Travel Agents” companies are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
This is a summary of recent ratings for TripAdvisor and its peers, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
TripAdvisor currently has a consensus target price of $39.82, suggesting a potential upside of 16.55%. As a group, “Travel Agents” companies have a potential upside of 16.46%. Given TripAdvisor’s higher probable upside, equities research analysts plainly believe TripAdvisor is more favorable than its peers.
TripAdvisor beats its peers on 7 of the 13 factors compared.
TripAdvisor, Inc. owns and operates a portfolio of online travel brands. TripAdvisor, the Company’s brand, is a travel site. The Company operates through two segments: Hotel and Non-Hotel. The Company’s Hotel segment includes click-based advertising and transaction; display-based and subscription-based advertising, and other hotel operations. The Non-Hotel segment includes Attractions, Restaurants and Vacation Rentals businesses. The Company’s platform also enables users to compare real-time pricing and availability for these experiences, as well as to book hotels, flights, cruises, vacation rentals, tours, activities and attractions, and restaurants, on either a TripAdvisor site or application, or a travel partner site or application. As of December 31, 2016, the Company’s TripAdvisor-branded Websites included tripadvisor.com in the United States and localized versions of the TripAdvisor Website in 48 markets and 28 languages around the world.
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