Why Is TripAdvisor (TRIP) Down 9% Since Last Earnings Report?

A month has gone by since the last earnings report for TripAdvisor (TRIP). Shares have lost about 9% in that time frame, underperforming the S&P 500.Will the recent negative trend continue leading up to its next earnings release, or is TripAdvisor due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts. TripAdvisor Q3 Earnings & Revenues Beat Estimates, Operating Costs UpTripAdvisor reported third-quarter 2024 non-GAAP earnings of 50 cents per share, which declined 4% from the prior-year quarter. The figure beat the Zacks Consensus Estimate by 13.64%.Revenues of $532 million remained flat year over year. The figure beat the Zacks Consensus Estimate of $526 million.The top line was affected by headwinds in TRIP’S legacy hotel meta offering which was partially offset by growth in the Viator and The Fork segment.TRIP’s experience category’s strong performance due to secular tailwinds, lower online presence and increased popularity of experiences contributed to the company’s top line. However, travel planning and guidance proved to be a headwind for the top line for its labor-intensive and time-consuming nature.Quarterly Details of TRIPBrand Tripadvisor: Revenues summed $255 million (accounting for 47.9% of the total revenues) for the segment, down 12% year over year. The figure beat the consensus mark of $254 million. Media and advertising revenues increased 5% year over year to $40 million, driven by the growth in off-platform revenues, Wanderlab studio’s offering and programmatic advertising, partially offset by the decrease in direct advertising revenues.Revenues from experiences and dining were $51 million, decreasing 7% year over year.  The metric was impacted by the growing momentum of the self-service sales model in the B2B segment and a decrease in experience revenues. Revenues from branded hotels decreased 17% year over year to $151 million due to softness in pricing in hotel meta. Other revenues within the segment were $13 million, which declined 19% year over year.Viator: The segment’s revenues totaled $270 million (accounting for 50.7% of the total revenues). The figure increased 10% year over year and lagged the Zacks Consensus Estimate of $271 million.TheFork: Revenues for the segment was $49 million (accounting for 9.2% of the total revenues), increasing 17% year over year. The figure beat the consensus mark of $46.41 million.TRIP’s Operating ResultsTripAdvisor’s selling and marketing costs remained flat year over year to $271 million. As a percentage of revenues, the figure remained flat year over year as well.General and administrative costs were up 4% from the year-ago quarter to $51 million. As a percentage of revenues, the figure expanded 100 bps year over year.Technology and content costs of $73 million increased 11% on a year-over-year basis. As a percentage of revenues, the figure rose 200 bps year over year.TRIP reported an operating margin of 13.16% in the quarter under review, which expanded 116 bps year over year.In the reported quarter, the total adjusted EBITDA margin was 22.93%, which contracted 90 bps on a year-over-year basis.Balance Sheet & Cash Flow of TRIPAs of Sept. 30, 2024, cash and cash equivalents were $1.11 billion compared with $1.18 billion as of June 30, 2024.The long-term debt was $832 million at the end of the third quarter compared with the previous quarter’s $841 million.Tripadvisor reported $44 million of negative cash from operations in the reported quarter against $52 million of cash generated in the prior quarter.The negative free cash flow was $64 million in the third quarter.How Have Estimates Been Moving Since Then?In the past month, investors have witnessed a downward trend in fresh estimates.The consensus estimate has shifted -83.87% due to these changes.VGM ScoresAt this time, TripAdvisor has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.OutlookEstimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, TripAdvisor has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.Performance of an Industry PlayerTripAdvisor is part of the Zacks Internet - Commerce industry. Over the past month, Etsy (ETSY), a stock from the same industry, has gained 7.1%. The company reported its results for the quarter ended September 2024 more than a month ago.Etsy reported revenues of $662.41 million in the last reported quarter, representing a year-over-year change of +4.1%. EPS of $0.45 for the same period compares with $0.64 a year ago.For the current quarter, Etsy is expected to post earnings of $0.96 per share, indicating a change of +23.1% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Etsy. Also, the stock has a VGM Score of B.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.1% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report TripAdvisor, Inc. 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