Trip.com Reports Better Than Expected First Quarter Numbers; Website visits hinted at it
Trip.com Group Limited, a travel services company based in China (NASDAQ: TCOM) offers a wide range of services, including hotel accommodation, transportation ticketing, tour packages, business travel management, property management systems, and advertising.
Recently, Trip.com reported better-than-expected results in the first quarter of 2022, beating both profit and revenue expectations, as indicated by TipRanks website visits tool.
Strong demand for outbound travel, primarily in Europe and Asia-Pacific, drove strong website bookings, which boosted first-quarter performance. However, the resurgence of COVID-19 in China negatively impacted results.
Following the update, the company’s shares were down 1.51% in Monday’s extended trading session.
Results in detail
Trip.com reported an adjusted loss per ADS of 0.06 RMB ($0.01) in the first quarter, compared to an adjusted loss of 0.34 RMB per share in the year-ago quarter. Analysts estimated a loss of $0.08 per ADS.
Net revenue was RMB 4.1 billion ($649 million), flat year-on-year, but beat analysts’ expectations of $575.04 million. Interestingly, vacation stays were a major contributor to the recovery of the Chinese domestic market, reflecting a 20% increase in local hotel bookings. In addition, global air ticket bookings jumped more than 270%, driven by the recovery of European and Asia-Pacific markets.
On a yearly basis, accommodation bookings revenue, tour package revenue, and business travel revenue fell 8%, 27%, and 12%, respectively, due to increased COVID-related disruptions in China.
However, transportation ticketing revenue was up 10% year-on-year thanks to a strong rebound in air travel in the overseas market.
Adjusted EBITDA margin was 2%, compared to negative 5% in the prior year quarter.
Trip.com CEO Jane Sun said, “While it was challenging for domestic travel due to the resurgence of COVID-19 in China during the first quarter, our results demonstrated our resilience amid a confluence of challenges and uncertainties. Although we may continue to see short-term fluctuations, travel demand is still strong and shows good long-term prospects. »
The Taking of Wall Street
The consensus among analysts is a strong buy based on four buys and one hold. Trip.com’s average price target of $28.20 implies 14.77% upside potential from current levels. Shares have gained 5.5% over the past six months.
Earnings results were evident on TipRanks’ new tool that measures visits to the Trip.com website. Pre-earnings, we were able to see information on Trip.com’s performance in the first quarter.
According to the tool, an upward trend in website traffic was visible. In the first quarter of 2022, the total number of visits to the Trip.com website showed an upward trend, globally, representing an increase of 11.56% compared to the fourth quarter and a considerable increase of 79 .21% year over year. This, in turn, indicated that the company could beat analysts’ expectations in the first quarter.
Predictions based on website visitation data from TipRanks matched reported results, with Trip.com reporting upbeat results in Q1 2022.
Amid macroeconomic uncertainty and disruption in China, Trip.com triumphed with a strong recovery in travel demand. This points to a long-term outlook as COVID-related restrictions ease. As a result, based on analysts’ bullish stance, strong price performance and positive sentiment signal from hedge funds according to the TipRanks Hedge Fund Trading Activity tool, investing in the stock is likely a prudent move.
Also, observing the website trends shown by the TipRanks website traffic tool could be productive for investors to reap potential gains.
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