Shares of Tripadvisor Inc (NASDAQ: TRIP) have already gained more than 30% year-to-date but a Bank of America analyst is convinced it has a lot more to go still.
Tripadvisor stock should be worth $38
Nat Schindler double upgraded the travel & tourism company this morning to buy and raised his price objective to $38. That suggests more than a 50% upside from here.
His bullish call is based primarily on Viator – the company’s marketplace for travel experiences.
Viator is making strong in-roads in an otherwise underpenetrated online experience booking market. Mgmt. has highlighted continued focus on brand marketing in Viator, which could keep near-term profit margins in check.
The ongoing shift in spending from goods to services/experiences is a catalyst for the Tripadvisor stock as well, the analyst added.
DAUs and downloads are improving
In the latest reported quarter, Viator made up 38% of Tripadvisor’s revenue versus 18% only in 2019. Schindler also quoted data from Sensor Tower that confirms the uptick in DAUs and downloads for his constructive view.
On Thursday, he raised his estimates for revenue not just for this year but also for 2024. The Bank of America analyst is bullish on Tripadvisor stock for the continued strength in the company’s core business as well.
Core TRIP remains a cash cow that while not a significant grower over time, can both fund and drive customers to high growth Viator.
Tripadvisor is scheduled to report its current quarter results next week. Consensus is for it to lose 9 cents a share versus 19 cents per share a year ago.
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