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TripAdvisor Inc TRIP

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Morningstar’s Analysis

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TripAdvisor’s Demand Improving; We Expect Further Lift Despite the Delta Variant; Shares Overvalued

Dan Wasiolek Senior Equity Analyst

Analyst Note

| Dan Wasiolek |

Narrow-moat TripAdvisor’s second-quarter sales rebounded to 56% of 2019 levels, ahead of our 50% estimate and up from 33% three months earlier, as improving vaccination rates expanded the travel recovery to regions like Europe. TripAdvisor’s experiences and dining segment revenue recovered to 56% of prepandemic marks in the quarter versus the 49% reported last quarter, with U.S. experience bookings ahead of 2019 levels in June. Brand hotel platform sales also increased to 62% of 2019 levels, up from 34% in the first quarter, with metasearch revenue nearly recovered in June. EBITDA progressed to $25 million in the quarter (10.6% margin), from negative $74 million last quarter, driven by the demand recovery and a streamlined cost structure.

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Company Profile

Business Description

TripAdvisor is the world’s leading travel metasearch company. The website offers 934 million reviews and information on 7.9 million accommodations, restaurants, experiences, airlines, and cruises. In 2020, 60% of revenue came from the company's hotel, media and platform segment, which includes hotel revenue generated through advertising on its metasearch platform as well as commissions received on its Instant Booking platform. Experiences and dining represented 31% of revenue with the remainder consisting of flight, rental, and nonbranded TripAdvisor sales.

400 1st Avenue
Needham, MA, 02494
T +1 781 800-5000
Sector Consumer Cyclical
Industry Travel Services
Most Recent Earnings Jun 30, 2021
Fiscal Year End Dec 31, 2020
Stock Type Cyclical
Employees 2,648