Analyst Estimates: Here's What Brokers Think Of TripAdvisor, Inc. (NASDAQ:TRIP) After Its Third-Quarter Report
TripAdvisor, Inc. (NASDAQ:TRIP) just released its third-quarter report and things are looking bullish. Results overall were credible, with revenues arriving 3.2% better than analyst forecasts at US$151m. Higher revenues also resulted in lower statutory losses, which were US$0.36 per share, some 3.2% smaller than the analysts expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
See our latest analysis for TripAdvisor
After the latest results, the 20 analysts covering TripAdvisor are now predicting revenues of US$1.05b in 2021. If met, this would reflect a huge 27% improvement in sales compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 93% to US$0.098. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$1.06b and losses of US$0.14 per share in 2021. Although the revenue estimates have not really changed TripAdvisor'sfuture looks a little different to the past, with a the loss per share forecasts in particular.
There's been no major changes to the consensus price target of US$22.09, suggesting that reduced loss estimates are not enough to have a long-term positive impact on the stock's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic TripAdvisor analyst has a price target of US$32.00 per share, while the most pessimistic values it at US$15.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. For example, we noticed that TripAdvisor's rate of growth is expected to accelerate meaningfully, with revenues forecast to grow 27%, well above its historical decline of 2.6% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 16% per year. So it looks like TripAdvisor is expected to grow faster than its competitors, at least for a while.
The Bottom Line
The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple TripAdvisor analysts - going out to 2024, and you can see them free on our platform here.
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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