Please ensure Javascript is enabled for purposes of website accessibility

Why Trivago Stock Dropped Today

By Steve Symington - Updated Feb 12, 2020 at 4:19PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The online travel platform delivered weak fourth-quarter results.

What happened

Shares of Trivago (TRVG -3.47%) were down 11.3% as of 1:30 p.m. EST Wednesday after the online travel platform specialist announced disappointing fourth-quarter 2019 results.

So what

Quarterly revenue fell 6.8% year over year to 155.5 million euros ($169.7 million), translating to net income of 3.1 million euros ($3.4 million), or 0.01 euro per share (down from 11 million euros, or 0.03 per share, a year earlier). Most analysts were modeling earnings of 0.01 per share on a more modest 4.8% revenue decline.

Bird's eye view of man researching travel information at a computer.

Image source: Getty Images.

Still, management remained optimistic.

"I am excited to see how Trivago is adapting to a rapidly changing market, and I am confident we are on the right track," CEO Axel Hefer said. "In 2020, we are focusing on building the most transparent and usable meta-search product in the market and integrating apartments and restricted rates into the platform."

Now what

CFO Matthias Tillmann added that in the first half of 2020, the company will "significantly invest into testing new concepts and approaches, and we will leverage the derived insights in the second half of 2020 and beyond."

But that also means investors should expect the company to forsake profitability in the near term as it pours resources into testing these new concepts. This isn't uncommon with innovative tech stocks, but there's no guarantee those investments will yield the desired fruit. Coupled with Trivago's underwhelming end to 2019, it's no surprise to see traders reeling in response.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Trivago Stock Quote
Trivago
TRVG
$1.67 (-3.47%) $0.06

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
349%
 
S&P 500 Returns
122%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/19/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.