Travel and tourism are hot activities these days, but you wouldn't know that from the drubbing TripAdvisor (TRIP 4.99%) stock was taking on Thursday. A lackluster earnings report led investors to aggressively sell off the travel portal operator's shares; as of mid-session trading, they were down by almost 15%.
A trip-and-fall quarter
TripAdvisor published its fourth-quarter and full-year 2025 results well before market open that day. For the quarter, the company's revenue was essentially flat year-over-year at $411 million. Net income not according to generally accepted accounting principles (GAAP) swooned by 12% to $5 million, or $0.04 per share.
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With that, TripAdvisor recorded a double miss on the average analyst estimates. The pundit consensus for revenue was slightly higher, at $412.3 million, while that for non-GAAP (adjusted) net income was $0.17 per share.
During the quarter, TripAdvisor saw a significant increase in its experiences offerings, which allow travelers to sign up for unique activities at their destination. However, this was offset by a decline in TripAdvisor's legacy businesses' take. Profitability was affected by relatively higher spend on bolstering the experiences segment.
NASDAQ: TRIP
Key Data Points
Other growth engines needed?
Investors are clearly unconvinced that the experiences business can move the needle for TripAdvisor, and I can't say I blame them.
Firstly, the company isn't the only travel operator offering such products, and even with the decline of the legacy business, it doesn't seem experiences will be a powerful source of growth. I don't see a compelling reason to own this stock just now.
