- TripAdvisor's stock has fallen by 23% since June 2014.
- TripAdvisor has shown improved growth trajectory and reduced dependence on ad-revenue.
- Given TripAdvisor's dwindling profit margins, a PE of 52 is steep.
TripAdvisor Valuations: Video Transcript
Hi. Welcome to this videograph about TripAdvisor (NASDAQ:TRIP). In spite of the huge correction, Trip Advisor is a risky bet. Here's why.
TripAdvisor's Stock Price Correction
TripAdvisor's stock has corrected by a good 23% since June twenty fourteen. Subsequently TripAdvisor valuations have also improved significantly.
TripAdvisor Revenue Growth A Positive
There are other positives for the travel site, like it's improved growth trajectory in recent quarters. And of course, the growing share of subscription and transaction revenue is encouraging, since TripAdvisor has been focusing on its instant bookings platform. This also reduces TripAdvisor's dependence on its ad revenue streams.
TripAdvisor Profit Margins Falling
However, TripAdvisor's profit margins have been on the decline over the preceding 3 years. Seen in this light, TripAdvisor's Price to earnings ratio of 52 makes the stock a risky bet.
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You can see our detailed TripAdvisor stock analysis video to know more about the company's fundamentals, like its free cash flows, daily updated valuations, stock movement vs major indices and more. If you're evaluating internet stocks in the travel industry, our Priceline stock analysis and Expedia stock analysis videos might interest you.