Ctrip.com Shares Plunged: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Chinese online travel company Ctrip.com International (Nasdaq: CTRP  ) sank 11% on Tuesday after its full-year revenue outlook came in below Wall Street expectations.

So what: While Ctrip's quarterly results -- $0.35 per-share profit on revenue of $129 million -- were actually in line with estimates, the forward-looking Mr. Market is choosing to focus on management's full-year guidance instead. The company now sees revenue growth of 15%-20% from the year-ago level -- solid, to be sure -- but given Ctrip's relatively lofty valuation, it wasn't quite enough to satisfy Wall Street's voracious growth appetite.

Now what: I'd look into this plunge as a possible entry point. Although it isn't growing as fast as Wall Street would like, Ctrip's fundamentals -- operating margins continue to crush those of rivals like Expedia (Nasdaq: EXPE  ) and eLong (Nasdaq: LONG  ) -- still make it a long-term pick worth looking into. With the shares flirting with 52-week lows today, now might even be a good time to do it.

Interested in more info on Ctrip? Add it to your watchlist.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Motley Fool newsletter services have recommended buying shares of Ctrip, and The Fool owns shares of it.Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.


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