TripAdvisor Stock Pops Over 11% Early Thursday

Shares recovered from after-hours losses Wednesday, but the company's second-quarter results were mixed, and the second half of 2019 might be even slower.

Daniel Miller
Daniel Miller
Aug 8, 2019 at 12:41PM
Technology and Telecom

What happened

Shares of TripAdvisor (NASDAQ:TRIP), a massive travel site with over 795 million reviews and opinions on anything from accommodations to experiences, jumped as high as 11.4% Thursday morning before giving some of those gains back, after releasing mixed results for the second quarter.

So what

One of the key metrics investors hoped to see was rebounding revenue. Unfortunately, revenue dropped 3% during the second quarter to $422 million, well short of analysts' estimates of $455.9 million. Adjusted EPS checked in at $0.45, also short of analysts' estimates of $0.51.

In addition to missing estimates, the company's results were hit or miss across the board. Consider that revenue for its hotels, media & platform segment was down 7% from the prior year, yet adjusted EBITDA for the same segment surged 27% thanks to improved efficiency in direct selling and marketing costs.

Another hit-or-miss result was found in its experiences & dining segment, which posted a 28% increase in revenue but a 56% plunge in adjusted EBITDA.

Man sitting on a deck overlooking the ocean.

Image source: Getty Images.

"We delivered strong second-quarter and first-half 2019 profitability amid ongoing investments aimed at future growth," CEO Steve Kaufer said in a press release. "We are operating with increased customer focus, and we are laying the foundation to deepen customer relationships with our platform and monetize our significant influence in travel."

Now what

Management made it clear that second-half 2019 growth will likely slow compared with the first half. But investors remain hopeful that revenue will rebound and accelerate in the fourth quarter, setting the stage for a stronger 2020. TripAdvisor's reach continues to increase with hundreds of millions of reviews and opinions covering an ever-increasing number of restaurants, accommodations, and travel activities.

But that increasing reach has failed to drive revenue higher. Until management can prove it can consistently do so, the stock will likely continue to tread water.