What happened

Shares of TripAdvisor Inc. (NASDAQ:TRIP) were losing altitude again today after the travel-review site posted yet another disappointing earnings report. As of 2:47 p.m. EST, the stock was down 9.9%.

A set of bungalows on a dock over a turquoise-colored sea

Image source: The Motley Fool.

So what

The company missed analyst estimates again as its transition to become more of an online travel agency, like Priceline Group and Expedia, and less of a travel review and recommendation site, continues to stall. Revenue in the quarter increased just 2% to $316 million, short of expectations at $326.5 million, or 6% growth. The bottom-line result was similarly underwhelming, as adjusted earnings per share fell from $0.45 a year ago to just $0.16, well below the consensus at $0.31.

While CEO Steve Kaufer said the company made significant progress toward improving its user experience, CFO Ernst Teunissen acknowledged the underwhelming performance: "As expected, our significant investments in these growth initiatives dampened full year 2016 financial results." He added, though, that the company was turning the corner and seeing growth rates improve, especially in the U.S.

Now what

Despite management's reassurances that the strategic transition is gaining traction, the quarter marked the third of the last four in which earnings results missed estimates, indicating that the process is taking longer than both the market and the company expected.

For 2017, management did not offer specific guidance, but said it expected double-digit revenue growth for the year, with a return to double-digit growth in its core click-based advertising segment. However, it said adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) would be flat or even down as the company continues to invest in other growth areas like vacation rentals, and hotel and flight reservations.

While the expected sales growth is encouraging, TripAdvisor still carries a pricey valuation, with a price-to-earnings ratio near 40. If earnings continue to fall in 2017, the stock could be in for another tough year.

Jeremy Bowman has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Priceline Group and TripAdvisor. The Motley Fool has a disclosure policy.