Tripadvisor (TRIP) earnings report for the 3rd quarter of their 2021 fiscal year
Category: Tripadvisor (TRIP)
Date: 9 November 2021 Stock Price of Tripadvisor (TRIP): $32.58 Market Capital of Tripadvisor (TRIP): $4.5 billion We take a look at the 3rd quarter earnings report of their 2021 fiscal year of Tripadvisor (TRIP), the world's largest travel guidance platform. For the quarter the group reported revenue of $303 million and net income of $23 million.
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- We are pleased to see a continued pick-up in consumer travel demand as borders open and vaccinations are more widely administered- Chief Executive Officer Steve Kaufer."
About Tripadvisor (TRIP)
Tripadvisor, the world's largest travel guidance platform*, helps hundreds of millions of people each month** become better travelers, from planning to booking to taking a trip. Travelers across the globe use the Tripadvisor site and app to discover where to stay, what to do and where to eat based on guidance from those who have been there before. With more than 988 million reviews and opinions of nearly 8 million businesses, travelers turn to Tripadvisor to find deals on accommodations, book experiences, reserve tables at delicious restaurants and discover great places nearby. As a travel guidance company available in 43 markets and 22 languages, Tripadvisor makes planning easy no matter the trip type. The subsidiaries of Tripadvisor, Inc. (NASDAQ:TRIP), own and operate a portfolio of travel media brands and businesses, operating under various websites and apps,
Overview of Tripadvisor (TRIP) 3rd quarter 2021 earnings report
Monthly unique users – During the third quarter of 2021, average monthly unique users on Tripadvisor-branded websites increased to approximately 76% of 2019’s comparable period, in comparison to approximately 70% and 55% of 2019’s comparable periods during the second and first quarters of 2021, respectively. This was driven by vaccine progress, various government restrictions being gradually lifted, albeit unevenly, and consumer travel demand’s improving recovery. Revenue – Q3 2021 total revenue of $303 million increased 101% year-over-year and was approximately 71% of the comparable period in 2019 (pre-COVID-19 timeframe), which showed improvement versus Q2 2021.
Cost performance – Total operating expenses were $287 million, up 46% year-over-year, increasing in all categories and primarily driven by the following: Cost of revenue was $23 million, up 77% year-over-year, primarily due to increased direct costs from credit card payment and other revenue-related transaction costs in correlation with the increase in revenue. Selling and marketing costs were $148 million, up 111% year-over-year, due to an increase in our SEM and other online traffic acquisition spend generally across all our segments and businesses in response to increasing consumer travel demand as travel and leisure activity restrictions ease and the travel sector recovers. Technology and content costs were $52 million, up 13% year-over-year. General and administrative costs were $37 million, up 6% year-over-year.
Profitability – Q3 2021 consolidated net income of $1 million, improved from the net losses in Q2 2021 and Q3 2020, primarily driven by an increase in revenue. This was partially offset by an increase in selling and marketing expenses in response to increasing consumer travel demand as travel and leisure activity restrictions eased during the quarter. Q3 2021 adjusted EBITDA of $72 million, was higher than Q2 2021 and Q3 2020, primarily driven by the factors noted above.
Cash & Liquidity – As of September 30, 2021, the Company had $682 million of cash and cash equivalents, an increase of $264 million from December 31, 2020.
Cost performance – Total operating expenses were $287 million, up 46% year-over-year, increasing in all categories and primarily driven by the following: Cost of revenue was $23 million, up 77% year-over-year, primarily due to increased direct costs from credit card payment and other revenue-related transaction costs in correlation with the increase in revenue. Selling and marketing costs were $148 million, up 111% year-over-year, due to an increase in our SEM and other online traffic acquisition spend generally across all our segments and businesses in response to increasing consumer travel demand as travel and leisure activity restrictions ease and the travel sector recovers. Technology and content costs were $52 million, up 13% year-over-year. General and administrative costs were $37 million, up 6% year-over-year.
Profitability – Q3 2021 consolidated net income of $1 million, improved from the net losses in Q2 2021 and Q3 2020, primarily driven by an increase in revenue. This was partially offset by an increase in selling and marketing expenses in response to increasing consumer travel demand as travel and leisure activity restrictions eased during the quarter. Q3 2021 adjusted EBITDA of $72 million, was higher than Q2 2021 and Q3 2020, primarily driven by the factors noted above.
Cash & Liquidity – As of September 30, 2021, the Company had $682 million of cash and cash equivalents, an increase of $264 million from December 31, 2020.
Tripadvisor (TRIP) management commentary on their 3rd quarter 2021 earnings
NEEDHAM, MA, November 8, 2021 — Tripadvisor, Inc. (NASDAQ: TRIP) today announced financial results for the third quarter ended September 30, 2021.
“We are pleased to see a continued pick-up in consumer travel demand as borders open and vaccinations are more widely administered,” said Chief Executive Officer Steve Kaufer. “We are seeing this benefit in our results—revenue increased to $303 million, reflecting sequential growth of 29% and year over year growth of 101%, with strong performance from all segments. In addition to macro tailwinds, we believe that our customer experience, expansive reach, product offerings, and position in the market will drive sustained growth and strong customer loyalty. We are very excited about the progress we are making in our key initiatives with a focus on the long-term, even as we remain cautiously optimistic about near-term travel trends."
Chief Financial Officer Ernst Teunissen added, “We drove continued improvements in our revenue, net income, and adjusted EBITDA. During the third quarter, as a result of our commitment to maintaining a more disciplined cost base, we achieved positive net income, while adjusted EBITDA increased to $72 million expanding our margin to 24%. In addition to the impact increasing consumer travel had on our financial profile, we are equally as pleased to see the continued efforts our teams have made to deliver on key initiatives designed to drive future growth.”
“We are pleased to see a continued pick-up in consumer travel demand as borders open and vaccinations are more widely administered,” said Chief Executive Officer Steve Kaufer. “We are seeing this benefit in our results—revenue increased to $303 million, reflecting sequential growth of 29% and year over year growth of 101%, with strong performance from all segments. In addition to macro tailwinds, we believe that our customer experience, expansive reach, product offerings, and position in the market will drive sustained growth and strong customer loyalty. We are very excited about the progress we are making in our key initiatives with a focus on the long-term, even as we remain cautiously optimistic about near-term travel trends."
Chief Financial Officer Ernst Teunissen added, “We drove continued improvements in our revenue, net income, and adjusted EBITDA. During the third quarter, as a result of our commitment to maintaining a more disciplined cost base, we achieved positive net income, while adjusted EBITDA increased to $72 million expanding our margin to 24%. In addition to the impact increasing consumer travel had on our financial profile, we are equally as pleased to see the continued efforts our teams have made to deliver on key initiatives designed to drive future growth.”
Tripadvisor (TRIP) stock price chart over the last 5 years
The image below shows the stock price history of Tripadvisor (TRIP) over the last 5 years. And its been a pretty bad time for Tripadvisor (TRIP) stockholders. Over the last 5 years the stock of Tripadvisor (TRIP) decreased by -34.6%.
The stock of Tripadvisor (TRIP) is trading at a lot closer to its 52 week low than it is to its 52 week high, which to us is a clear indication that the short term sentiment and momentum of Tripadvisor's stock is negative at this point in time,
The stock of Tripadvisor (TRIP) is trading at a lot closer to its 52 week low than it is to its 52 week high, which to us is a clear indication that the short term sentiment and momentum of Tripadvisor's stock is negative at this point in time,
Tripadvisor (TRIP) stock valuation
So what do we value Tripadvisor (TRIP) stock at after the release of their latest earnings report? Based on Tripadvisor's latest earnings report our valuation models provides a target price (full value price) for Tripadvisor at $21.10 a stock. We therefore believe that the stock of Tripadvisor is overvalued.
We usually suggest that long term and fundamental investors get in at least 10% below our target (full value) price which in this case is $21.10 therefore we believe a good entry point into Tripadvisor stock is at $19 or below.
Since Tripadvisor (TRIP) is trading at well above our suggested entry price we rate the stock of Tripadvisor as a SELL
We usually suggest that long term and fundamental investors get in at least 10% below our target (full value) price which in this case is $21.10 therefore we believe a good entry point into Tripadvisor stock is at $19 or below.
Since Tripadvisor (TRIP) is trading at well above our suggested entry price we rate the stock of Tripadvisor as a SELL
Next earnings release of Tripadvisor (TRIP)
It is expected that Tripadvisor (TRIP) will publish their 4th quarter 2021 earnings report in late February 2021