TripAdvisor (NASDAQ:TRIP) Shares Gap Up - Still a Buy?

Key Points

• TripAdvisor shares gapped up after news that it agreed to sell TheFork to American Express for $700 million, a move seen as unlocking hidden value and improving financial flexibility.
• Analysts responded positively overall, with Jefferies reiterating a Buy rating and a $15 price target, while the stock’s premarket jump reflected bullish investor sentiment.
• Despite the upbeat reaction, there are still some caution signals: TripAdvisor recently missed earnings estimates, and options activity in puts suggests some traders are hedging against downside risk.

TripAdvisor, Inc. (NASDAQ:TRIP - Get Free Report)'s stock price gapped up prior to trading on Monday . The stock had previously closed at $12.41, but opened at $13.60. TripAdvisor shares last traded at $13.4380, with a volume of 3,256,436 shares changing hands.

TripAdvisor News Roundup

Here are the key news stories impacting TripAdvisor this week:

• Positive Sentiment: TripAdvisor agreed to sell TheFork for $700 million, which highlights hidden value in its asset portfolio and could improve financial flexibility. Tripadvisor Enters into Agreement to Sell TheFork to American Express for $700 Million
• Positive Sentiment: Analyst commentary turned supportive, with Jefferies maintaining a Buy rating and saying the sale could unlock hidden value, including an upside price target of $15. Jefferies’ Fuller Reiterates Buy on TripAdvisor After TheFork Sale Unlocks Hidden Value, Sees Upside to $15 Price Target
• Positive Sentiment: Market reaction was bullish, with shares rising in premarket trading after news of the divestiture, indicating investor optimism around the strategic shift. American Express to buy Tripadvisor's restaurant booking platform TheFork in $700 million deal
• Neutral Sentiment: TripAdvisor’s move signals a sharper focus on its core travel experiences strategy, but the long-term impact will depend on how effectively it deploys the sale proceeds. Tripadvisor To Sell TheFork for $700 Million to Fuel Its Bet on Experiences
• Negative Sentiment: There was also notable options activity in TripAdvisor puts, suggesting some traders are still hedging against downside risk. Traders Buy High Volume of TripAdvisor Put Options NASDAQ: TRIP

Analysts Set New Price Targets

TRIP has been the subject of a number of research analyst reports. UBS Group reduced their price objective on shares of TripAdvisor from $16.00 to $13.70 and set a "neutral" rating for the company in a research report on Monday, April 27th. Barclays reduced their price objective on shares of TripAdvisor from $10.00 to $9.00 and set an "underweight" rating for the company in a research report on Monday, May 11th. JPMorgan Chase & Co. reduced their price objective on shares of TripAdvisor from $12.00 to $11.00 and set an "underweight" rating for the company in a research report on Friday, May 8th. Weiss Ratings reaffirmed a "sell (d)" rating on shares of TripAdvisor in a research report on Friday, May 15th. Finally, BTIG Research reaffirmed a "buy" rating on shares of TripAdvisor in a research report on Monday. Five analysts have rated the stock with a Buy rating, six have assigned a Hold rating and five have assigned a Sell rating to the company. Based on data from MarketBeat, the company currently has an average rating of "Hold" and an average price target of $14.76.

TripAdvisor Stock Performance

The company has a debt-to-equity ratio of 1.36, a current ratio of 1.25 and a quick ratio of 1.25. The stock has a market capitalization of $1.50 billion, a P/E ratio of 128.59, a PEG ratio of 2.44 and a beta of 0.90. The stock's 50-day simple moving average is $10.92 and its 200 day simple moving average is $11.99.

TripAdvisor (NASDAQ:TRIP - Get Free Report) last posted its earnings results on Thursday, May 7th. The travel company reported ($0.11) earnings per share for the quarter, missing analysts' consensus estimates of ($0.03) by ($0.08). TripAdvisor had a return on equity of 5.73% and a net margin of 0.99%.The firm had revenue of $382.40 million for the quarter, compared to analyst estimates of $384.69 million. During the same period in the prior year, the business posted $0.14 EPS. The firm's quarterly revenue was down 4.0% compared to the same quarter last year. Research analysts expect that TripAdvisor, Inc. will post 0.69 EPS for the current fiscal year.

Insider Buying and Selling at TripAdvisor

In other news, CEO Almir Ambeskovic sold 8,000 shares of TripAdvisor stock in a transaction on Tuesday, June 2nd. The stock was sold at an average price of $12.30, for a total transaction of $98,400.00. Following the completion of the sale, the chief executive officer owned 34,396 shares of the company's stock, valued at approximately $423,070.80. This trade represents a 18.87% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Corporate insiders own 2.00% of the company's stock.

Institutional Investors Weigh In On TripAdvisor

Hedge funds and other institutional investors have recently modified their holdings of the company. Headwater Capital Co Ltd acquired a new position in TripAdvisor in the third quarter valued at about $14,959,000. Holocene Advisors LP raised its stake in TripAdvisor by 78.5% during the third quarter. Holocene Advisors LP now owns 2,210,903 shares of the travel company's stock worth $35,949,000 after acquiring an additional 972,369 shares in the last quarter. Public Sector Pension Investment Board raised its stake in TripAdvisor by 12.5% during the third quarter. Public Sector Pension Investment Board now owns 452,986 shares of the travel company's stock worth $7,366,000 after acquiring an additional 50,355 shares in the last quarter. SG Americas Securities LLC raised its stake in TripAdvisor by 1,712.3% during the fourth quarter. SG Americas Securities LLC now owns 1,107,995 shares of the travel company's stock worth $16,132,000 after acquiring an additional 1,046,858 shares in the last quarter. Finally, Hillsdale Investment Management Inc. acquired a new position in TripAdvisor during the third quarter worth about $6,294,000. Institutional investors and hedge funds own 98.99% of the company's stock.

About TripAdvisor

TripAdvisor NASDAQ: TRIP is a leading online travel company that operates a digital platform for travel information, reviews and booking services. The company's flagship website and mobile apps allow users to access and contribute travel-related content—ranging from hotel and restaurant reviews to ratings for tours, attractions and vacation rentals—helping consumers plan and book trips around the world.

The core of TripAdvisor's offering is its community-driven review system, which aggregates user-generated feedback alongside editorial content and professional photography.

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