Shareholders of TripAdvisor (TRIP 0.68%) enjoyed some of the best returns in the entire market last year as the travel booking giant's stock shot higher by 56%, versus a 6% drop in the S&P 500. Yet the foundation for that strong performance was set by low investor expectations about the business following two consecutive outlook downgrades by management in 2017.

Coming into its first earnings report of 2019, TripAdvisor has a much higher bar to clear if it wants to surprise Wall Street with better-than-expected operating and financial metrics. Here are the key trends for shareholders as the company closes fiscal 2018 on Wednesday, Feb. 13, and looks to a new year.

A couple checks in to a hotel.

Image source: Getty Images.

Growth wins and losses

TripAdvisor's core hotel-booking segment hasn't grown in over a year because of a variety of challenges. These include broader industry issues like weak bidding rates for online advertising. But the bigger factor has been management's shift away from spending on its own low-return marketing initiatives. Pulling back on those programs led to lower traffic on its travel sites, a problem that has been compounded by the company's transition to a fully mobile-based booking service.

Trends have shown improvement in recent months, though, and revenue per hotel shopper even cracked back into positive territory last quarter after having declined for over a year. These wins have CEO Stephen Kaufer and his team feeling confident that they'll get the hotel segment back to growth as early as the fourth quarter to mark an important rebound from the 4% drop investors saw through the first nine months of the year.

TripAdvisor's non-hotel business, which includes bookings for attractions, restaurants, and vacation rentals, is expected to grow at a similar 25% clip. Executives have big plans for this segment, and these high expectations have been bolstered by the fact that the division has shot up to represent almost a third of the broader business in 2018, from less than 10% in 2014.

Check out the latest TripAdvisor earnings call transcript.

Earning more cash

In addition to the modest growth rebound, TripAdvisor's improving profitability has been a key factor in its recent rally. Due to management's focus on slower but more efficient sales gains, the hotel segment's adjusted earnings rose 24% over the last nine months to help segment profit margin improve to 30% of sales from 23% in the prior-year period. Investors will be looking for further gains here, especially as hotel booking rates accelerate.

The non-hotel segment is still firmly in growth mode as the company works on scaling up its inventory of bookable activities. Thus, it's likely that margins in this division will trail the broader company average. Still, look for generally improving profitability here.

A new outlook

Assuming it meets its latest outlook, TripAdvisor will wrap up a fiscal 2018 characterized by steadily improving sales trends and far higher profitability. That's essentially the opposite result from what investors saw in the previous year.

The good news is that the company looks set to enter 2019 on a firmer demand footing and with more cash that it can direct toward its growth initiatives. We'll find out on Wednesday whether management believes those assets will support more complete operating results in 2019 after posting a net loss (but higher sales) in 2017, and reduced sales (but healthier profits) in 2018.