Glimmers Of Hope Amid A Disappointing Q3 From TripAdvisor

While Tripadvisor Inc TRIP reported disappointing Q3 results, Deutsche Bank’s Lloyd Walmsley noted that the trends had improved exiting the quarter.

Walmsley maintained a Hold rating on the company, with a price target of $63.

TripAdvisor cuts its 2017 margin guidance, while highlighting that there were some positive signs of the company being close to bottoming.

“While Street estimates are likely to come down again, and uncertainty remains high, we got glimmers of hope that as comps ease growth will return,” the analyst mentioned.

The stock declined 13 percent following the announcement of the disappointing Q3 results. The company reported in-line EPS of $0.53 for Q3, with lower than expected revenue of $421 million.

Walmsley also pointed out that despite expectations that the company would return to positive growth, there didn't appear to be any signs of a breakthrough in IB monetization, while desktop shopper growth had declined 6 percent year-on-year, and continued to be “a key impediment to TripAdvisor becoming a growth story again.”

The Silver Lining

The positive during the quarter was that the company pointed to improving trends in hotel shopper growth exiting the quarter, along with growth in click-based and transactional revenue in the U.S. during September.

Mobile shoppers also continued to grow, while app hotel shoppers saw 50 percent year-on-year growth, and app bookings from vaulted credit cards also saw sustained growth.