Author: Buynholdisdead Date: 08/05/2014
TripAdvisor (Trip)
Price: $94.07
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Reported July 23rd, 2014 04:30PM
Today the price is $94.07: The PE ratio is 64.43 The P/S is 12.84. The stock went down $5.57 the day after the report.
Fourth Quarter and Full Year 2011 Financial Results
February 8,2012 earnings highlights:
** Revenue was $137,798 million
** TTM Revenue was $637,063 million or $4.72 per share
** Quarterly Related-party revenue from Expedia = $37.5 million
** Earnings were $0.16
** TTM earnings were $1.32
**Gross Profits were $135 million
** YoY Gross Profits were $626 million
** Quarterly Gross margins 98%: Operating margins 24%
**YOY Gross margins 98% : Operating margins 42%
** Diluted share count 134,865,250
** Cash $183.5 million: debt $46.7 million
**Free Cash Flow Quarterly $20.9 million
** YoY Free Cash Flow $196.6 million
First Quarter 2012 Financial Results
May 1st, 2012 earnings highlights:
** Revenue was $183.7 million
** TTM Revenue
** Quarterly Related-party revenue from Expedia = $51.6 million
** Earnings were $0.35
** TTM earnings were
**Gross Profits were $180.9 million
** YoY Gross Profits
** Quarterly Gross margins 99%: Operating margins 40%
**YOY Gross margins: Operating margins
** Diluted share count 136,157,675
** Cash $208.6 million: debt $44.6 million
**Free Cash Flow Quarterly $22.4 million
** YoY Free Cash Flow
**Trading range Low $30.12 High $37.89
**P/E ratio range
**P/S range
Second Quarter 2012 Financial Results
July 24th, 2012 earnings highlights:
** Revenue was $197 million
** TTM Revenue
** Quarterly Related-party revenue from Expedia = $55.7 million
** Earnings were $0.37
** TTM earnings were
**Gross Profits were $194.2 million
** YoY Gross Profits
** Quarterly Gross margins 99%: Operating margins 42%
**YOY Gross margins: Operating margins
** Diluted share count 141,736,894
** Cash $478 million: debt $54.4 million
**Free Cash Flow Quarterly $55.8 million
** YoY Free Cash Flow
**Trading range Low $39.40 High $47.81
**P/E ratio range
**P/S range
Third Quarter 2012 Financial Results
November 1st, 2012 earnings highlights:
** Revenue was $212.7 million
** TTM Revenue
** Quarterly Related-party revenue from Expedia = $56.9 million
** Earnings were $0.41
** TTM earnings were
**Gross Profits were $209.8 million
** YoY Gross Profits
** Quarterly Gross margins 99%: Operating margins 43%
**YOY Gross margins: Operating margins
** Diluted share count 143,656,985
** Cash $548.4 million: debt $64.5 million
**Free Cash Flow Quarterly $69.1 million
** YoY Free Cash Flow
**Trading range Low $28.63 High $39.00
**P/E ratio range
**P/S range
Fourth Quarter 2012 Financial Results
February 13, 2013 earnings highlights:
** Revenue was $169.4 million up 23% from 137.8 million
** TTM Revenue $ 763 million up 20% from $637.1 million
** Quarterly Related-party revenue from Expedia = $39.5 million
** Earnings were $0.23 up 44% from $.16
** TTM earnings were $1.37 up 4% from $1.32
**Gross Profits were $166 million up 23% from 135 million
** YoY Gross Profits were $ 750.9 million up 20% from $626.2 million
** Quarterly Gross margins 98%: Operating margins 28%
**YOY Gross margins: 98% Operating margins 39%
** Diluted share count 143,813,851
** Cash $486.5 million: debt $72.1 million
**Free Cash Flow Quarterly $62.4 million up 197% from $21 million
** YoY Free Cash Flow 209.8 million up 7% from $196.6 million
**Trading range Low $32.50 High $49.35
**P/E ratio range 23.37 to 36.02
**P/S range 6.13 to 9.30
First Quarter 2013 Financial Results
May 7th, 2013 earnings highlights:
** Revenue was $229.9 million up 36% from 169.4 million
** TTM Revenue $ 809.2 million up 23% from $657.3 million
** Quarterly Related-party revenue from Expedia = $60,511 million
** Earnings were $0.43 up 23% from $.35
** TTM earnings were $1.45 up 10% from $1.32
**Gross Profits were $226.3 million up 25% from 181 million
** YoY Gross Profits were $ 796.2 million up 21% from $660.2 million
** Quarterly Gross margins 98%: Operating margins 38%
**YOY Gross margins: 98% Operating margins 38%
** Diluted share count 144,655,240
** Cash $401.1 million: debt $61.3 million
**Free Cash Flow Quarterly $34.4 million up 54% from $22.4 million
** YoY Free Cash Flow 221.8 million up 30% from $170.7 million
**Trading range Low $42.04 High $56.80
**P/E ratio range 28.99 to 39.17
**P/S range 7.52 to 10.15
Second Quarter 2013 Financial Results
July 24th, 2013 earnings highlights:
** Revenue was $246.9 million up 25% from 197 million
** TTM Revenue $ 859.1 million up 25% from $685.1 million
** Quarterly Related-party revenue from Expedia = $54,322 million
** Earnings were $0.46 up 24% from $.37
** TTM earnings were $1.54 up 20% from $1.28
**Gross Profits were $242.7 million up 25% from 194.2 million
** YoY Gross Profits were $ 844.7 million up 23% from $687.9 million
** Quarterly Gross margins 98%: Operating margins 38%
**YOY Gross margins: 98% Operating margins 37%
** Diluted share count 145,664,210
** Cash $396.1 million: debt $64.6 million
**Free Cash Flow Quarterly $75.3 million up 35% from $55.8 million
** YoY Free Cash Flow 241.3 million up 41% from $171.4 million
**Trading range Low $51.72 High $65.41
**P/E ratio range 33.58 to 42.47
**P/S range 8.77 to 11.09
Third Quarter 2013 Financial Results
October 23rd, 2013 earnings highlights:
** Revenue was $255.1 million up 20% from 212.7 million
** TTM Revenue $ 901.5 million up 26% from $717 million
** Quarterly Related-party revenue from Expedia = $56.2 million
** Earnings were $0.38 down 7% from $.41
** TTM earnings were $1.51 up 18% from $1.28
**Gross Profits were $249.9 million up 19% from 209.8 million
** YoY Gross Profits were $ 884.8 million up 26% from $703.5 million
** Quarterly Gross margins 98%: Operating margins 33%
**YOY Gross margins: 98% Operating margins 35%
** Diluted share count 145,454,000
** Cash $432.4 million: debt $66.2 million
**Free Cash Flow Quarterly $129.3 million up 87% from $69.1 million
** YoY Free Cash Flow 301.4 million up 80% from $168.2 million
**Trading range Low $68.11 High $82.19
**P/E ratio range 45.11 to 54.43
**P/S range 10.99 to 13.26
Fourth Quarter 2013 Financial Results
February 11th, 2014 earnings highlights:
** Revenue was $212.7 million up 26% from 169.4 million
** TTM Revenue $ 944.7 million up 24% from $763.1 million
** Quarterly Related-party revenue from Expedia = $46.4 million up from 39.5 million (Analyst thought this would drop when they were spun off from Expedia.)
**Gross Profits were $208.1 million up 25% from 165.9 million
** YoY Gross Profits were $ 926.9 million up 23% from $750.9 million
** Quarterly Gross margins 98%: Operating margins 13%
**YOY Gross margins: 98% Operating margins 31%
** Net Income $20.3 million down 40% from $33.7 million
** EPS were $0.14 down 39% from $.23
** TTM EPS were $1.41 up 3% from $1.37
** Diluted share count 145,280,000 up from 143,814,000
** Cash $482.4 million: debt $68.5 million
**Free Cash Flow Quarterly $55.1 million down 12% from $62.4 million
** YoY Free Cash Flow 294.1 million up 40% from $209.8 million
**Trading range Low $72.57 High $93.13
**P/E ratio range 51.5 to 66.0
**P/S range 11.16 to 14.32
First Quarter 2014 Financial Results
May 6th, 2014 earnings highlights:
** Revenue was $281 million up 22% from 230 million
**Sequentially Revenue was up 32%
** TTM Revenue $996 million up 21% from $824 million
**Gross Profits were $273 million up 21% from 226 million
** YoY Gross Profits were $ 974 million up 22% from $796 million
** Quarterly Gross margins 97%: Operating margins 34%
**YOY Gross margins: 98%
** Net Income $68 million up 10% from $62 million
** EPS were $.47 up 9% from $.43
** TTM EPS were $1.45 flat from $1.45
** Diluted share count 146 million up from 145 million
** Cash $461 million down QoQ from 482.4 million
**Debt $71 million up from $68.5 million
**Stock based compensation was Flat at 14 million YoY
**Free Cash Flow Quarterly was $89 million up 154% from $35 million
**Trading range Low $75.13 to High $109.79
**P/E ratio range 51.81 to 75.72
**P/S range 11…01 to 16.09
Second Quarter 2014 Financial Results
July 23rd, 2014 earnings highlights:
** Revenue was $323 million up 31% from $247 million
**Sequentially Revenue was up 15% from $281 million
** TTM Revenue $1.07 billion up 25% from $859 million
**Gross Profits were $314 million up 29% from $243 million
** Quarterly Gross margins 97%: Operating margins 31%
** Net Income $68 million flat from $67 million
** EPS were $.47 flat from $.46
** TTM EPS were $1.46 down 5% from $1.53
** Diluted share count 146 million flat from 146 million
** Cash $638 million up QoQ from $482 million
**Debt $94 million up from $72 million
**Stock based compensation was up from 10 million to 15 million YoY
**Free Cash Flow Quarterly was $136 million up 79% from $76 million
**Trading range Low $80.16 to High $111.24
**P/E ratio range 54.90 to 76.19
**P/S range 10.94 to 15.19
Trip is still growing revenue’s strong. They are up 31% YOY and the next quarter we should see even stronger revenues. Their Gross Profits were up 29% and they have Gross Margins of 97% which is great. This gives them plenty of money to invest in their business. Their Operation Margins are down sequentially from 34% to 31% and their EPS is basically flat from $.46 to $.47 YOY. They have upped their advertising, which they advised last quarter they would do. It is now sitting at 127 million which is a 53% increase. If you have watched any television lately you will have noticed Trip ads on tv. Their slogan is don’t go to Spain, go to Trip Spain, or some other country that they decide to put into their ads. I do not find the ads that inviting but we should see in the next few quarters if it shows up in Revenues. Right now Selling and Marketing is sitting at 39% of revenue which is one reason earnings are flat. They are keeping SG&A in control at 10% which is basically flat YOY. Their stock based compensation has gone up from 10 million to 15 million but it still sits under 5% of Revenue’s. I think this is reasonable for a company with this type of growth. Their tax rate has climbed from 29.2% to 30.6%. It has climbed due to a change in jurisdictional earnings and discrete items. Their overseas earnings keeps their effective tax rate lower than the federal statutory rate. On the balance sheet their deferred merchant payable (where the customer pre pays and then Trip pays the merchant at a later date) was a large driver of cash flow. Trip thinks this will only grow and will allow them easy money to use in their business.
Trip did not repurchase any shares of common stock this quarter and they still have $105 million remaining to repurchase shares. This is an interesting point that I found on page 21 of the 10-Q.
Liberty Interactive Corporation
As of June 30, 2014, Liberty Interactive Corporation (“Liberty) beneficially owned 18,159,752 shares of common stock and 12,799,999 shares of Class B common stock. Assuming the conversion of all of Liberty’s shares of Class B common stock into common stock, Liberty would beneficially own 21.7% of the outstanding common stock. Liberty may be deemed to beneficially own equity securities representing approximately 56.7% of voting power.
This is nothing alarming but something that should be kept an eye on.
Stats
**Click Based advertising up 28% YOY. Click based advertising is 73% of total revenue in the second Quarter and was 74% of revenue in second Quarter of 2013.
**Display-based advertising up 19% YOY. Display based advertising represented 11% of revenue in the second quarter of 2014 down from 13% in the second quarter of 2013.
** Subscription, transaction and other increased 55% YOY. This represented 16% of total revenue compared to 13% in the second quarter of 2013.
**Revenue in North America grew 20% YOY representing 50% of total revenue.
**Revenue from Europe, Middle East and Africa grew 47% YOY and represented 33% of total revenue. **Revenue from Asia-Pacific region grew 40% YOY and represented 13% of total revenue.
**Revenue from Latin America grew 30% and represented 4% of revenue.
**International revenue was 53% of total revenue up from 49%.
**TripAdvisor eclipsed 170 million reviews and opinions on more than 4.2 million places to stay, places to eat and things to do- including more than 850,000 hotels and accommodations and approximately 640,000 vacation rentals, 2.3 million restaurants and 450,000 attractions in 142,000 destinations.
**TripAdvisor launched localized versions of its website in Austria, Vietnam, Israel, Finland, Hungary in Q2 and Czech Republic, bringing its total points of sale to 43. TripAdvisor also debuted its new “Don’t just Visit” TV ad campaign in the United States, Australia, and France.
**TripAdvisor Mobile Audience grew to nearly 50% of total traffic including approximately 140 million average unique monthly visitors via smartphone and tablet devices during the quarter.
**TripAdvisor introduced its new Instant Booking feature to 100% of U.S. iOS and Android smartphone users, allowing travelers to quickly and easily complete a hotel reservation through hotel or online travel agencies.
**TripAdvisor Business Listing expanded its relationship with Best Western, including the addition of more than 1,000 properties; and signed Plateno Hotels Group, one of China’s leading multi-brand hotel groups which operates 7Days Inn, China’s number one budget hotel brand.
**TripAdvisor acquired this year La Fourchette, Vacation Home Rentals, and Tripbod.
Conclusion: I was thinking that I should have more of my money invested overseas but after looking at companies like TripAdvisor why would I? They are doing it for me. They keep growing their revenues and this quarter a majority of it was overseas (I am in the United States). Their instant booking feature is another great way to reduce friction. That is what TripAdvisor wants and needs to do. This will increase their sales to their customers and will reap them more revenue. They just keep innovating. With their Meta and now Book it the site just keeps getting easier to use. With the Book It you do not even have to leave their site to book the room. It gets processed by the hotel or OTA but all from their website. All of the OTA’s are not willing to go along yet because this is just one more way TripAdvisor is reeling them in to make them more reliant on their service. You can see Priceline is trying to staunch this by some of their recent additions to their company. (Kayak, Open Table) I know Priceline gets it but it seems that they are playing catch up and TripAdvisor is ahead. Priceline now is trying to become what TripAdvisor is and we will see. This is going to be an Epic battle and will take years to play out. But there is plenty of room for both of them.
Another thing that TripAdvisor is doing is interlacing their business with Social Media companies. As people use twitter and Facebook, TripAdvisor is there to facilitate the exchange of opinions and travel information. It all works seamlessly with your Facebook account allowing users to look up travel information and to share your trips. Also they are increasing their leverage into Mobile Usage. Now you can book a trip all from your cell phone. Also you can download apps that will allow you to see all that there is to do in many cities across the globe. These apps can be used off line also which should make it easier to find you way around your destination. Right now this is available for 300 cities but they plan on making it available for every country, province, state, and city in the world.
On their Vacation Rental business they have the free to list option. This model has driven strong inventory growth, as they not have nearly 640,000 properties, up 40% YOY. I watched the CEO of Homeaway scoff at TripAdvisor’s rental business but that tells me something. He must be watching them. I think this will only keep growing for TripAdvisor.
Finally, The 3rd quarter will be the first full kind of clean comp from their metasearch transition and they claim they are seeing great results. Since last years 3rd quarter was where they rolled out metasearch they think the next quarter will be an easy comp. I like this company and it always look expensive. I think a P/S of 11 is a good price point to buy. I know that is not cheap but at this stage of its growth you probably will not get a much cheaper price.
As always any questions, statements, or corrections are greatly appreciated.
http://discussion.fool.com/trip-page-post-1-31254716.aspx
Andy