Trip.com Group Limited (TCOM) on Q1 2021 Results - Earnings Call Transcript
Operator: Thank you for standing by and welcome to the Trip.com Group 2021 Q1 Earnings Conference Call. All participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. I would now like to hand the conference over to Michelle Qi, Senior IR Director of Trip.com Group. Please go ahead. Michelle Qi: Thank you. Good morning and welcome to Trip.com Group's 2021 Q1 earnings conference call. Joining me today on the call are Mr. James Liang, Executive Chairman of the Board; Ms. Jane Sun, Chief Executive Officer; and Ms. Cindy Wang, Chief Financial Officer. James Liang: Thank you, Michelle. Thank you everyone for joining us on the call today. Due to China's successful containment of the pandemic, the recovery of China's domestic travel market continues to show momentum. The border is still shut; many have turned to domestic travel to high-quality scenic spots and destinations. During the May holiday, approximately 230 million trips were made by tourists domestically, representing a 3% increase compared to the same period in 2019 before COVID, setting a new all-time high for the holiday. On our platform long-distance travel across provinces in Mainland China has made a full recovery and short-distance local travel continues its strongest growth trajectory. Trip.com Group submission is to pursue the perfect trip for a better world. Throughout the past two decades, we have continuously exploring and innovating to further improve our offerings. We have established a leading global one-stop travel platform where users can easily define comprehensive products with reliable services and guarantees, and differentiated the travel content, all reachable within a few taps of our mobile application. Following the strong recovery of China domestic travel market, we have successfully launched our second listing -- secondary listing in Hong Kong in April. This marks a milestone in our development from which we embarked our new journey. Currently, our market share in China's domestic travel market is only in mid-teens, while global market share is still in the low single-digits. We are excited for the potential of our growth. Jane Sun: Thanks, James. Good morning, everyone. I would like to first quickly walk through our Q1 results and then touch base on our post-pandemic growth drivers and future opportunities. First, Q1 overall highlights. Due to the travel restrictions in Mainland, China to contain virus in January and February of 2021 around Chinese New Year, our top line decreased by 13% year-over-year and about 50% as compared to the same period in 2019. Despite such challenges China's domestic travel market rebounded strongly in March and with even great momentum in April and May. Both hotel and air ticket have grown strongly. Cross-sells between air to hotel products in Q1 increased significantly compared to the same period in 2019. We are also delighted to see revenue from other business lines in Q1 exceeded that the same period in 2019. Revenue from corporate tower management has completely recovered compared to 2019 pre-COVID. And new initiatives such as travel financing services and domestic travel advertisement have both delivered strong results. Cindy Wang: Thanks, Jane. Good morning, everyone. To avoid comparing with the same period in 2020, when the pandemic outbreak first appeared, I will in fact compare our – performance in the first quarter with the same period in 2019 and the fourth quarter of 2020. For the first quarter of 2021, Trip.com Group reported net revenue of RMB 4.1 billion, representing a 50% decrease from the same period in 2019. The first half of the quarter was significantly impacted by the resurgence of COVID cases in China and the travel restrictions that followed. However, our domestic business showed strong resilience and quickly rebounded after the Chinese New Year holiday. Both our domestic hotel and air business have fully recovered to pre-COVID level since early March and achieved double-digit growth during the month compared with the same period in 2019. Revenues from corporate travel business grew 6% in Q1 compared with 2019, mainly driven by the expansion of its client pool and increase of cross-selling to accommodation products. Revenues from other business grew 17% in Q1 compared with 2019, thanks to the fast development of our new initiatives, such as travel financing services and domestic travel advertisement business. Gross margin was 75% for the first quarter of 2021, decreased from 82% for the previous quarter, largely due to the travel restrictions at the outset of 2021. Excluding share-based compensation charges, our adjusted operating expenses decreased by 30%, compared with the same period in 2019 and were flattish compared to the previous quarter. Adjusted product development expenses for the first quarter increased by 9% to RMB2.1 billion from the previous quarter, primarily due to fluctuation in expenses related to product development personnel. Total headcount in our product and development team is largely stable, and the average salary increased modestly as we entered into 2021. Adjusted sales and marketing expenses for the first quarter decreased by 22% to RMB930 million from the previous quarter, mainly due to the decrease in expenses related to sales and marketing promotion activities in response to the decreased travel demand in the quarter. Adjusted G&A expenses for the first quarter increased by 20% from the previous quarter mainly due to the fluctuations in the allowance for the expected credit loss. Following the common market practice, we start to disclose adjusted EBITDA from this quarter. The difference between adjusted EBITDA and non-GAAP operating income represents the depreciation and amortization expenses, which is available on our 6-K form. Adjusted EBITDA was RMB -- was negative RMB216 million and adjusted EBITDA margin was negative 5% for the first quarter of 2021. Operator: Thank you. Your first question comes from Alex Poon with Morgan Stanley. Alex Poon: Thanks management for taking my questions. Congrats on the very strong results and rebound in travel demand. My question is regarding the resurgence of COVID-19 globally. Travel -- international travel remains uncertain. So how will Trip.com prepare the strategy and focus in this environment? Thank you very much. James Liang: Thanks for the question. We have full confidence in the complete resumption of international travel. We have already seen the promising recovery of travel in some countries and regions with widespread vaccination rollout. Across all markets we have seen domestic travel market rebound and gradually make up the loss of cross-border travel. Recently, our total hotel bookings have reached pre-COVID level, while prices remain under pressure. In Q1 overseas hotel bookings by non-Chinese customers on our Trip.com platform have already recovered to the pre-pandemic level. Our teams are utilizing this time to enhance our fundamentals in price product, service and app user experience for overseas users. With that will be best positioned to capture the pent-up travel demand when international travel recovers. Jane Sun: Thank you. Operator: Your next question comes from Ronald Keung with Goldman Sachs. Ronald Keung: Thank you, Jane, James, Cindy and Michelle. I guess following on that recovery part could you -- could management share just how we see the forward say a few quarters and maybe into 2022, just how are we expecting that international recovery path may be if not quantitative maybe qualitatively that recovery path? And how would we plan our sales and marketing or strategies on our spending alongside that eventual international recovery path? And are we thinking about how domestic will shift or domestic strength that we see now actually maintain, while international will be incremental kind of recovering with that expectation? Thank you. Jane Sun: Thanks for your question. We look at our business in three segments. The first one is domestic travel. The second one is for the areas outside of China, the domestic travel within each respective countries. The third one is cross-border travel. So first of all, for domestic travel with China we have full confidence that our government have very effective control procedures to make sure Mainland China's economy will grow strongly. And normally when the economy is growing strongly our travel market will outpace the GDP growth in that market. And we will work very hard to serve our customers to capitalize on the strong momentum. So that's the first thing within domestic travel for Mainland China. The second thing is outside of China, we also have seen a strong recovery in each respective markets we are targeting at. So based on the numbers we are looking at for the most recent months, these -- the domestic travel in the respective areas outside of Mainland China have already recovered to pre-COVID level. So we have very strong confidence that applying for whatever worked in the Mainland China will also be capitalized on some of the markets we are targeting at. The third one is cross-border trouble. That is a little bit -- it takes more coordination between nations. But we are encouraged by the development of the vaccination. I think each government is pushing very hard to make sure the people within each country are well protected. So for what we have seen UK, Europe and the United States are moving very fast in that front. And also Asia, most of the country have demonstrated their ability to control and also control and handle these kind of crisis quite well. So we are hopeful that Asia, Europe, America gradually will be opening up. And with more vaccination is taken hopefully the passport will indicate the passenger's information. And therefore, gradually we will be able to capitalize on the type of demand for cross-border transactions as well. Thank you. Operator: Your next question comes from Alex Yao with JPMorgan. Alex Yao : Thank you, management for taking my question. I would like to follow up with Ronald's question, but from a slightly different angle. So I think ultimately COVID will be behind us, it could be the end of this year, it could be mid of next year. When we enter into the post-COVID stage, how do you think about the more normalized growth rate in the next couple of years? What are the new revenue opportunities you are seeing post COVID as a result of perhaps a consumer behavior change or business behavior change? Thank you. Jane Sun: Yes. I think we are all very excited to wait for the pass of the COVID. From our search results on our sites, the pent-up demand is very strong. So we are confident eventually the scientists around the world will come up with very strong method to contain this virus. And governments also through the past year have accumulated a lot of experience to make sure that going forward the virus will be well contained. And our team works very hard to accumulate our knowledge and experience to handle different situations. So, within our domestic travel, there are also a lot of opportunity. Our market share still is quite low. It's in the teens. In 2019, our market share is around 13%. There are still a lot of address the market that we have not tapped into. So, for example, our content-driven strategy is a new area. The market will grow quite nicely in the next three to five years, and if we can address and take about 3% share to 5% share, that's quite significant already. Secondly, we also saw the short-haul travel which is serving as an alternative when people are contained within their own borders. And thirdly, corporate travel as we discussed is growing very strongly. Traditionally, it's adjusted by the other channels, but we ought to use very good services to address the customers who need to travel from cities to cities and frequently on the road. So with our strength in hotel, air and the other area, we will be able to help the customers who travel so frequently around China. And fourth also, the cross-sell opportunity on our wind stop platform represents a good opportunity to make sure our customers' needs are addressed very nicely rather than having our customers to searching -- to search all around the website to find the right product. We ought to provide better services for them, when we use our technology and one-stop shopping platform to provide the best service for our customers. And these new initiatives are mainly centered around domestic travel for China. And in addition, I think the cross-border travel, inbound travel and for the customers around the world, we also add another layer of the growth. And our team is working very hard with our global team, just to make sure that our strength in the Mainland China eventually will be duplicated in the global places. So we are excited for the future growth. Thank you. Operator: Your next question comes from Thomas Chong with Jefferies. Thomas Chong: Hi, good morning. Thanks management for taking my question. I have a question relating to the expense side. Given that we have done a lot of work to optimize the cost, how should we think about the trend in expenses going forward after COVID? Thank you. Jane Sun: Thank you, Thomas. Yes, thanks to our largely flexible cost and expenses structure and efficient operating management. During past year, we actually further streamlined our operations across business lines in addition to certain adjustments related to COVID. Our improvement on content and cross-selling going forward will further help us to lift our marketing efficiency. We expect -- in terms of the cost trend in the year 2021, we expect comparatively modest increase in personnel-related expenses. And sales and marketing expenses are largely discretional and adjusted in accordance with our business recovery. And we will continue to adopt an ROI-driven strategy. Furthermore, we believe our improvement on content and cross-selling will help us to improve our marketing efficiency in general. But at the same time, we will also reserve certain budgets in the short term to development -- to develop content ecosystem and to prepare for recovery and growth of the international market. Thank you. Operator: Thank you. Your next question comes from James Lee with Mizuho. James Lee: Great. Thanks for taking my questions. My question is regarding advertising opportunity. I was hoping maybe, Jane, you always spoke about live streaming and StarHub. They all sound very interesting. And can we maybe get an early sense about understanding the friction that you're experiencing with advertiser when they try to adopt the new content platform and how you plan to resolve it specifically? And also, maybe early learnings from consumers, should we have any? And what do they like about your new content platform? And what needs to improve? And lastly, maybe over longer term, can you talk about what kind of critical mass that you need in terms of users and engagement and that will lead to ultimately improve monetization. Thanks so much. Jane Sun: Sure. From a long-term perspective, the content and the -- content and also advertisement market currently is about CNY 90 billion market. And by 2025, the market size is grow to be -- is expected to be around 140% -- CNY 140 billion. And our target is that, if we work very hard to address about 3% to 5% of the total market that can be quite significant for our top line and bottom line as well. Secondly, the strength of our platform is that, the quality of our customers is very strong. And they're looking for inspiration when they decide where to go, particularly during the holiday season, summer vacations, Chinese New Years, et cetera. So when we post our content onto our platform, we're already seeing the users doubled for that channel. And also the same for the time spent in this channel also doubled significantly in these channels. So that gives us a very strong indication that customer needs the content. And we will also offer a very customized match between the customers, what they're looking for; to be suitable for their family need, for their interest. Thirdly, with the strong customer interest as well as their spending power, the areas, the hotels, travel destinations and attractions, if we do a very good analysis we also offer the best alternatives for customers to look at. So that also is strength for our platform. We have seen very strong conversion on our platform, when we post the relative and very carefully analyzed matching for our customers. So these are the strengths for our platform. And of course, we only started this system one month ago. The momentum is strong. But it takes our team for our strong execution and to make sure the product is suitable for both, our customers and partners. But we are confident as soon as we keep up with our strong execution, we'll be able to offer the best product for both, of our consumers as well as the partners. Thank you. Operator: Our next question comes from Joyce Ju with Bank of America. Joyce Ju: Good morning Jane, James, Cindy and Michelle, congrats on the very strong results this quarter. And thanks for taking my questions. My question is related to government's recent antitrust push. We have seen a couple of segment leaders, recently being inspected. And also some of them even pay the penalties antitrust movement. So I just want to ask like, if we have been -- we had related like risk? And if we have been in any communications with the regulators in this perspective, given, I think, the antitrust looks good at the very beginning. There are a couple areas of expectations like, they actually include like, price discrimination like, monopoly power of the marketplaces. Just try to understand how we actually avoid the -- into a situation like being fined or like get penalty from this? Thank you. Jane Sun: Thank you. We fully support our government, for their efforts to create a healthy and sustainable growth market. Our belief is that, the market, if we can create a market that is healthy and sustainable, we -- the industry will grow in a very healthy manner. Secondly, our market share is quite small still. The market share for 2019 is around 13%. There -- the travel industry is fast growing. We need quality service provider, to address our customers' needs. So we'll work very hard with the government, with our partners to make sure our customers' demand is very well addressed. Thank you. Operator: Our next question comes from Tian Hou with TH Capital. Tian Hou: Good morning management. Thanks for taking my question. I have two quick questions. On the income statement, for the corporate travel, so I saw like, a year-on-year 100% growth and it's really outstanding. So I really want to understand, what are the drivers behind the 100% year-on-year growth? And what could be the future growth in this line, at least the outlook for that? The second one is for other business. So it is actually showing the year-on-year positive returns. So can management give some color to tell us, what are within the others? And what items within the others are driving force for this part of revenue to grow that fast? That's my two questions. Thank you. Jane Sun: Thank you, Tian. Ctrip is always the leader in – especially in the business travel space. Of course, the 100% growth, the first reason is the lower – comparatively low base of last year because last – the first quarter of last year is the outbreak of the pandemic. Basically there is a very low traffic, especially for the business travels. Therefore, we had 100% growth. And secondly, it actually reflects the fact that once there is a pandemic or the – or any emergencies, a market leader will always consolidate or have growing our market share very quickly. This also reflected in our high growth in the business travel, especially the corporate travel. And the third reason – and – our hotel business in the corporate travel grow very fast significantly, firstly because we have a very competitive pricing or competitive product offering to serve our corporate travel needs; and secondly, we also successfully cross-sell hotel product from the air business, from the air customers from the corporate travel. These are the three reasons, why you see a very strong growth in the corporate travel. And the second question, the others basically is the reflect of the market value adjustment for the available-for-sale investments. The first – actually this basically reflects the brand transit of the market pickup for the first quarter. All our investment are classified as available-for-sale. They have to do re-evaluations on a quarterly basis. So compared with the last year – fourth quarter last year, all the market pricing grow significantly. This is the reason why we had a one-time gain on this category. Operator: Your next question comes from Brian Gong with Citi. Brian Gong: Thanks management for taking my question. Congratulations on the solid results and the recovery. So with the strong recovery of the massive travel, management's expectation for following quarters by different segments, especially for upcoming summer break and the Golden Week, National Day. Thank you. Jane Sun: Yes the Golden Week holiday is very strong. As we discussed, the pent-up demand have driven the growth. As previously discussed, the volume growth for the hotel is more than -- it's a 3-digit growth for year-over-year. For 2019, it's also grew more than 50% year-over-year. For air ticket, the growth is also 3 digits compared to the last year. But also for the next year, it's -- for the 2019, it's more than 30% year-over-year growth. For the Q2 number, I will turn it to Cindy for highlights. Cindy Wang: Yes. We will not provide quarterly guidance anymore in order to comply with the Hong Kong Stock Exchange regulations, but we would like to share some recent colors with our investors. For the quarter-to-date, our total revenue was up more than 80% year-over-year, driven by the strong domestic travel recoveries. But at the same time, the international revenues remain -- still remain under pressure. So compared to 2019, both our domestic hotel and air ticket reservations grew more than 20% compared quarter-to-date. Specifically, during the past Labor Day holiday, our total domestic reservations grew by more than 270% year-over-year and 2019, among which domestic hotel and air reservations were up by more than 50% and 30%, respectively, compared with 2019. The faster recovery of our domestic China travel will gradually and fully make up the loss of outbound business. Recently, our total hotel reservations have returned to pre-COVID level, but the price is still under some pressure. Thank you. Operator: That does conclude our question-and-answer session. I'll now hand back to Michelle Qi for closing remarks. Michelle Qi: Thank you. Thank you, everyone, for joining us today. You can find the transcript and webcast update call on investors.trip.com. We look forward to speaking with you on our second quarter 2021 earnings call. Thank you, and have a good day. Jane Sun: Thank you very much. Cindy Wang: Thank you. James Liang: Thank you. Operator: That does conclude our conference for today. Thank you for participating. You may now disconnect.
Trip.com Group Limited (TCOM) Q1 2025 Earnings Insights
Trip.com Group Limited (NASDAQ:TCOM) Q1 2025 Earnings Overview
Trip.com Group Limited (NASDAQ:TCOM) Overview and Analyst Insights
- Trip.com's consensus price target remains stable at $79.67, indicating analyst confidence.
- The company's stock price decline is viewed as unjustified due to strong revenue growth and improved margins.
- Trip.com reported a 23% year-over-year revenue growth in the fourth quarter, with a quarterly earnings of $0.60 per share, surpassing estimates.
Trip.com Group Limited (NASDAQ:TCOM) is a prominent travel service provider, offering a variety of services such as accommodation reservations, transportation ticketing, and corporate travel management. The company operates under well-known brands like Ctrip, Qunar, Trip.com, and Skyscanner, serving both domestic and international markets. Founded in 1999 and based in Singapore, Trip.com has become a key player in the travel industry.
The consensus price target for Trip.com has remained stable at $79.67 over the past month and quarter, indicating a consistent outlook from analysts. This stability suggests confidence in the company's performance despite recent stock price declines. The price target has increased from $74.01 a year ago, reflecting a positive shift in analyst sentiment, possibly due to improved business performance or favorable market conditions.
Trip.com's recent stock price decline is seen as unjustified, given the company's strong revenue growth and improved operating and net margins. The travel and tourism market in China, Trip.com's key market, is experiencing significant growth, offering substantial revenue potential. This growth provides a competitive advantage over competitors focused on slower-growing regions. Analyst Ellie Jiang from Macquarie has set a price target of $75.40 for Trip.com.
Trip.com reported robust fourth-quarter results, with a 23% year-over-year revenue growth. However, investments in international markets have impacted margins, leading to a dip in US shares, while Hong Kong shares have increased. Analysts recommend buying on the dip, citing promising international expansion and reasonable margin traction as key factors. Trip.com is valued at 15 times its forward EBITDA, suggesting a price of $79 per share, representing a 37% upside.
The company's recent earnings call featured key participants like CEO Jane Sun and CFO Cindy Wang, discussing financial performance and strategic direction. Trip.com achieved quarterly earnings of $0.60 per share, surpassing the Zacks Consensus Estimate of $0.52 per share. This performance marks an improvement from the previous year's earnings of $0.56 per share, reinforcing the positive outlook for the company's stock.
Trip.com Group Limited (NASDAQ:TCOM) Earnings Preview
Trip.com Group Limited, trading as NASDAQ:TCOM, is a leading travel service provider. It offers a comprehensive range of travel services, including hotel reservations, transportation ticketing, packaged tours, and corporate travel management. As a major player in the travel industry, TCOM competes with other giants like Expedia and Booking Holdings. The company is set to release its first-quarter 2025 earnings on May 19.
Analysts expect TCOM to report earnings per share (EPS) of $0.86, with revenue projected at $13.8 billion. This reflects a positive outlook, as the company has consistently surpassed expectations in previous quarters. In the last quarter, TCOM reported an adjusted EPS of $0.60, exceeding the estimated $0.52, and saw a 23% increase in net revenue year over year.
Despite a decline in expected earnings per share from $6 to $5.57 compared to the same period last year, TCOM is projected to see an increase in quarterly revenue to $13.82 billion, up from $11.9 billion a year earlier. This growth is driven by strong hotel bookings and increased traffic, as highlighted by the company's robust performance in the travel and hospitality sector.
TCOM's financial metrics indicate a stable market position. The company has a price-to-earnings (P/E) ratio of approximately 19.14 and a price-to-sales ratio of about 5.78. Its enterprise value to sales ratio is around 5.58, and the enterprise value to operating cash flow ratio is notably high at approximately 871.81. These figures suggest a strong valuation in relation to its earnings and revenue.
The company's debt-to-equity ratio is relatively low at 0.28, indicating a conservative use of debt in its capital structure. Additionally, TCOM has a current ratio of approximately 1.51, reflecting its ability to cover short-term liabilities with short-term assets. As the earnings call approaches, analysts continue to revise their forecasts, reflecting dynamic market expectations surrounding TCOM's performance.
Trip.com Reiterated as Bernstein’s Top Pick Despite Macro Fears
Bernstein SocGen Group reaffirmed its Outperform rating on Trip.com (NASDAQ:TCOM), maintaining a $75 price target and naming it the firm’s top pick within its coverage universe. Analysts believe the current market valuation, hovering around 13 times forward earnings, significantly underestimates the company’s potential—even when factoring in conservative growth assumptions.
While macroeconomic headwinds remain a concern, Bernstein sees Trip.com as well-positioned to weather turbulence in the travel sector. In a modeled scenario of a 1% GDP decline, the firm expects a moderate impact on the company’s performance, with outbound travel dipping by 5% and hotel growth slowing by 2% due to consumer downtrading. However, analysts argue that a shift toward more affordable domestic travel could largely offset international softness, keeping overall revenue growth resilient—dipping only slightly from 16% to 14% for the full year.
Bernstein also compared Trip.com’s risk-reward profile to peers. Tencent Music Entertainment (TME) is viewed as a steady performer with stable earnings, though its valuation is already aligned with its current earnings trajectory. Baidu, on the other hand, is seen as more vulnerable, with its AI monetization efforts potentially derailed by greater exposure to macroeconomic volatility.
In contrast, Trip.com’s strong domestic market, diversified travel offerings, and potential to benefit from travel pattern shifts reinforce its appeal. With a compelling valuation and manageable risk factors, Bernstein continues to see substantial upside for the stock.
Trip.com Reiterated as Bernstein’s Top Pick Despite Macro Fears
Bernstein SocGen Group reaffirmed its Outperform rating on Trip.com (NASDAQ:TCOM), maintaining a $75 price target and naming it the firm’s top pick within its coverage universe. Analysts believe the current market valuation, hovering around 13 times forward earnings, significantly underestimates the company’s potential—even when factoring in conservative growth assumptions.
While macroeconomic headwinds remain a concern, Bernstein sees Trip.com as well-positioned to weather turbulence in the travel sector. In a modeled scenario of a 1% GDP decline, the firm expects a moderate impact on the company’s performance, with outbound travel dipping by 5% and hotel growth slowing by 2% due to consumer downtrading. However, analysts argue that a shift toward more affordable domestic travel could largely offset international softness, keeping overall revenue growth resilient—dipping only slightly from 16% to 14% for the full year.
Bernstein also compared Trip.com’s risk-reward profile to peers. Tencent Music Entertainment (TME) is viewed as a steady performer with stable earnings, though its valuation is already aligned with its current earnings trajectory. Baidu, on the other hand, is seen as more vulnerable, with its AI monetization efforts potentially derailed by greater exposure to macroeconomic volatility.
In contrast, Trip.com’s strong domestic market, diversified travel offerings, and potential to benefit from travel pattern shifts reinforce its appeal. With a compelling valuation and manageable risk factors, Bernstein continues to see substantial upside for the stock.
Jefferies Stays Bullish on Trip.com, Citing Strong Travel Trends and AI Upside
Jefferies reaffirmed its Buy rating and $77 price target on Trip.com Group (NASDAQ:TCOM), expressing confidence in the company’s ability to deliver on expectations for the current quarter and beyond.
Jefferies sees robust domestic demand driving growth in hotel bookings and air ticketing, with volume expansion as the primary catalyst. Outbound travel trends also continue to gain momentum, as more travelers extend their range, boosting international activity on the platform.
Trip.com is also expected to benefit from its accelerated adoption of artificial intelligence, which is enhancing both user experience and operational efficiency. Jefferies believes the integration of AI tools will play a key role in driving cost savings and increasing engagement.
Jefferies Stays Bullish on Trip.com, Citing Strong Travel Trends and AI Upside
Jefferies reaffirmed its Buy rating and $77 price target on Trip.com Group (NASDAQ:TCOM), expressing confidence in the company’s ability to deliver on expectations for the current quarter and beyond.
Jefferies sees robust domestic demand driving growth in hotel bookings and air ticketing, with volume expansion as the primary catalyst. Outbound travel trends also continue to gain momentum, as more travelers extend their range, boosting international activity on the platform.
Trip.com is also expected to benefit from its accelerated adoption of artificial intelligence, which is enhancing both user experience and operational efficiency. Jefferies believes the integration of AI tools will play a key role in driving cost savings and increasing engagement.
