Trip.com Group Limited (TCOM) on Q2 2021 Results - Earnings Call Transcript
Operator: Thank you for standing by and welcome to the Trip.com Group 2021 Q2 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, Head of Investor Relations. Please go ahead. Michelle Qi: Thank you. Thank you, all. Good morning and welcome to Trip.com Group's 2021 Q2 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. During this call, we will discuss our future outlook and performance, which are forward-looking statements made under the Safe Harbor provision of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, our results may be materially different from the views expressed today. A number of potential risks and uncertainties are outlined in Trip.com Group's public filings with the Securities and Exchange Commission. Trip.com Group does not undertake any obligation to update any forward-looking statements, except as required under applicable law. James, Jane, and Cindy will share our strategy and business updates, operating highlights, and financial performance for the second quarter of 2021 as well as outlook color for the third quarter of 2021. After the prepared remarks, we will have a Q&A session. With that, I will turn the call over to James. James, please. James Liang: Thank you, Michelle. Thank you everyone for joining us on the call today. Although speaking the Chinese domestic travel market was encouraging this quarter. We have witnessed a strong recovery momentum. The pent-up demand unleashed following the relaxation of travel restrictions. Despite the regional and temporary effect of COVID surge. Overall travel activities in the country continue along the growth trajectory. The vaccination rate in China is still ramping up more than a billion Chinese citizens are now fully vaccinated. With a larger vaccinated population, we're confident to anticipate a more stable momentum and credible demand. During the past quarter, we continue to dive deep into the Chinese domestic market to meet the evolving needs and demands of domestic travelers. We continue to make this progress a major focus area, such as content, product, service technology in the supply chain. Jane will share more details on this in her section. We are delighted to embrace the recent regulatory change in our domestic market as we believe they will favor fair competition and promote innovation in the industry. This could help foster a sustainable and healthier market. Trip.com Group has now benefited from an organized and regulated environment to calculate our growth in efficient manner over the past 22 years. We proactively communicate with authorities and abide by the rules. We believe the new regulations will benefit all players in the industry. Trip.com Group also pledged to give back more to the society to see the government's call for common prosperity. Over the past quarter, we launched a five-year rural revitalization initiative to boost the local tourism and support low-income communities. The initiative aims at building tenant country receives a five-star hotel quality, empowering 100 rural villages and creating 10,000 rural tourism talents for the industry. We believe rural tourism is a golden key to open the door to rural revitalization. Trip.com Group currently repeats, we will serve as an example and benchmark for future development of rural tourism as well as attracting younger generations return as a great social values in their hometown. On the international front, many countries also embarked on a transition towards normalcy. As we see rising vaccination rates and more favorable policies in place to facilitate travel, there's no doubt Travel and Tourism is getting back on track. We have established a leading position in Asia Pacific market with strong China outbound travel in the past years, following our focus global vision strategy, we have continued to strengthen our product competitiveness to Europe over the past few years on top of strong synergy between . Beside the air ticket booking market in Europe is close to that in the Asia Pacific. Together, they account for about 50% what total air travel without strategically out in both Asia Pacific and Europe, we see a lot of potential in the global air ticket booking market. By valuing emphasis on both globalization and domestic development, such as new circulation strategy will quantify Trip.com Group resilience in the face of pandemic challenge. Moving forward, we will continue to be adaptive and responsive to the changing market conditions and evolving demands on post dynamic travelers. As we have mentioned in the previous quarters, we will continue to leverage our content to inspire travelers and to leverage our supply chain to provide users with the most appealing product choices. All these offerings are backed by our ever improving product capabilities and service quality. It is our mission to bring forth the most enjoyable booking experience. We can see the value as we exceed the needs and demands of our customers. With that, I will turn the call over to Jane for operations highlights. Jane Sun: Thanks, James. Good morning, everyone. I would like to start with a brief overview of our performance in the past quarter and update our strategic focuses. First, overall performance overview. In the second quarter, our total net revenue increased by 86% year-over-year, and 43% quarter-over-quarter, driven by strong recovery momentum of China's domestic market. Despite regional resurgence of COVID cases in Guangdong, our domestic revenue increased by 80% year-over-year, and has surpassed the pre-COVID 2019 level. Both our domestic hotel and air ticket to GMV increased by about 150% year-over-year, and their bookings increased by double digits when we compared with the same period pre-COVID in 2019. Now withstanding the effect of Guangdong cases in June, the rest of the country was largely unaffected and has demonstrated a strong growth momentum. Domestic hotel and air ticket bookings in non-Guangdong areas were up for approximately 30% compared to the same period in pre-COVID 2019. Our corporate travel management business and other revenues also continue to ride and grow by double digits compared to the same period pre-COVID in 2019. As we further penetrated the second tier cities, we are glad to see total hotel bookings. Our feature platform increased significantly growing by more than 50% in Q2, when we compared to the same period in 2019. Vacation travel continues to serve as a major driver for domestic recovery, with local hotel booking growing nearly 80%, both versus pre-COVID in 2019 and the cross selling ratio from transportation to hotel also improved by more than 20% versus pre-COVID 2019. Second, our major focus on domestic market. Throughout the second quarter, we continued to stick with our focus on domestic market in terms of supply chain content capabilities, service quality and technology advancement in order to lay out a solid foundation for new growth drivers beyond the pandemic. First, on supply chain, we scaled up our support for our suppliers by providing technology supporting the training for hoteliers to support enhancing their revenue management, market effectiveness, and many other aspects. We also consistently invest in developing new products and services to empower suppliers to better capture evolving customer needs. For example, our dual membership program with airlines create value for both sides by rewarding customers for their loyalty and extending the airlines customer space. We also cooperated with domestic Chinese airport to improve the efficiency of connecting flights. Many of them have seen significant year-over-year growth in passenger traffic. Second, in terms of the content, we're making good progress in our content strategy has begun to bear fruit. In Q2, the quantity of the content published on our platform nearly doubled. And the number of the influencers on our platform increased by approximately 50% when compared to Q1. User engagement also improved this quarter with more than 35% of our unique visitors accessing the content platform and spending more time on our multimedia offerings. New users have shown a high level of engagement with our content platform. Our content to transaction conversion rate was also on the rise this quarter. We continue to reinforce our infrastructure and output of our first class live streaming and promotion capabilities for travel industry. We are glad to have to see the top players, our star hub benefits from the rewarding conversion rates. We also continue to extend the star hub upon a base to empower more market players. We continue to invest in the service quality and technology. We enhanced our service reliability and price transparency. We also have consistently invested in our R&D capabilities and continue to improve operating efficiency. We can now handle booking changes increase much more efficiently amid the resurgence of the domestic COVID cases in August, millions of reservation were canceled on Trip.com Group platforms close to our 2020 level during the first wave of the outbreak. Yet, the amount of the phone calls handled by real person operatives has decreased by 50%. The number of the customers waiting the line for core pickup also shrunk by 90% which are empowered by our investment in technology. On the international front, our global brands have enhanced our collaboration in terms of the supply chain and technology capabilities to generate strong synergy in order to better capture the recovery trends in the global market. We are glad to see that our brands in Europe showed a strong and continuing sequential improvement in the air ticket booking over the past few months with several countries such as Germany, France and Italy already surpassing the comparative 2019 level. Trip.com become the first OTA to offer euro rail and inter rail train passes, which are very popular among millennials and Generation Z travelers in Europe. It is a great opportunity to tap into these markets as we further our contribution to the global travel recovery. Regarding the recent regulatory changes, we fully support and abide by new policies and guidelines as they aim at fostering sustainable digital economy in the long run. Over the past two decades, we have grown in the healthy and organized the market environment as the digitalization continues to drive industry evolution. Today, we are all digitally connected and the boundaries between online and offline engagement are becoming blurred. The whole travel industry has witnessed with a rising wave of online and offline integration. Such digital transformation is further accelerated by pandemic. In 2019, Trip.com Group only accounted for nearly 13.7% of market share of China domestic travel market and still has ample room to grow as Chinese economy grows. We anticipate to see our players to thrive in the market with fair and transparent guidelines of the new regulation. In terms of our rural revitalization initiatives, our first three Trip.com Group control retreat in Province, Hunan Province, and The Hunan Province already open for business. Large majority of the employees of these retreats come from the local areas and are receiving professional trainings and enjoy a higher than average salary from a local standard. By honing the local people's skills, and improving their livelihood, we hope to narrow the gap between the poor and the rich. We look forward to leading by example and encouraging more industry players to enjoy the development of rural tourism and leverage rural revitalization. Amidst the height of pandemic Trip.com Group made a significant effort to support the supply chain and bolster the recovery of our travel industry. We facilitate the guarantee cancellations and the cover losses for our customers in order to protect the best interest and offer financial assistance to support our business partners during a very challenging period. As of August 2021, Trip.com Group has also donated three million medical masks and hundreds of oxygen concentrators to more than 25 countries and the regions around the world battling COVID. We hope to inspire more companies to contribute to the common prosperity of the society. As an industry leader, we will take on more responsibility to take care of our customers, our partners, and our employees. They're happy and will continue to be challenges along the way. But we will always endeavor to maximize our social impact while increasing our company's value. We will keep on improving as we strive towards our ideals. With that, I will now turn the call over to Cindy. Cindy Wang: Thanks, Jane. Good morning, everyone. For the second quarter of 2021 Trip.com Group reported net revenue of RMB 5.9 billion, representing an 86% increase year-over-year, and 43% increase quarter-over-quarter, primarily due to a strong recovery momentum of the China's domestic market, despite regional and temporary impacts of the pandemic and travel restrictions in the Guangdong Province. Accommodation reservation revenue for the second quarter of 2021 was RMB 2.5 billion representing a 96% increase year-over-year and a 55% decrease quarter-over-quarter recovering to 72% of the 2019 level. This was from to the strong release of pent-up in domestic travel demand following the lifting of restrictions. Despite regional COVID outbreaks, hotel booking in the domestic China also saw double-digit growth when compared with the same period in 2019. Transportation ticketing revenue for the second quarter of 2021 was RMB 2.1 billion, representing an 80% increase year-over-year and 37% increase quarter-over-quarter recovery to 61%. of the 2019 levels, among which domestic air ticket booking revenue doubled year-over-year increased by double-digit when compared to the same period in 2019. Packaged tour revenue for the second quarter of 2021 was RMB 367 million, representing a 182% increase year-over-year and 117% increase quarter-over-quarter recovering to 35% of the 2019 level. This was contributed by a modest recovery of the domestic China market. Domestic attraction ticketing booking tripled year-over-year and nearly doubled when compared to the same period in 2019. Corporate travel revenue for the second quarter of 2021 was RMB 390 million, representing a 141% increase year-over-year and 55% increase quarter-over-quarter. This segment continues to gain momentum, which revenue growth growing by 26% when compared to the same period in 2019 mainly driven by strong growth of accommodation bookings. Revenues from other business for the second quarter of 2021 was RMB 614 million, representing a 33% increase year-over-year and 2% increase q-on-q showing an increase of 17% when compared to the same period in 2019. This is mainly contributed by rapid growth in our travel, financing services and domestic advertising business. Gross margin was 79% for the second quarter of 2021, increasing from 75% in the previous quarter, mainly driven by strong top-line recovery and improved operating efficiency. Excluding share-based compensation charges, our adjusted operating expenses decreased by 23%, compared to the same period in 2019. Adjusted product development expenses for the second quarter stays approximately the same in the previous quarter and achieved the saving of 16% when compared to the same period in 2019, as we continued to run in and maintain a stable headcount, product development personnel. Adjusted sales and marketing expenses for the second quarter increased by 47% from previous quarter, primarily due to the increase in expenses related to sales and marketing promotion activities in response to increase the travel demand in this quarter. This reflects a saving of 34% when compared to the same period in 2019, as we fought a more prudent spending protocols. Adjusted G&A expenses for the second quarter stays approximately the same as in the previous quarter increased by 77%, year-over-year, primarily due to a reversal of bad debt provisions in the second quarter of 2020, for the company's travel suppliers, getting as a saving of 16%, when compared to the same period in 2019. Adjusted EBITDA for the second quarter was RMB 916 million compared to RMB negative 216 million in the previous quarter. Adjusted EBITDA margin was 16% for the second quarter compared to negative 5% in the previous quarter. Diluted loss for ordinary share and for ADS were RMB 1.0 or U.S. dollar $0.16 for the second quarter. Excluding share-based compensation charges and fair value changes of equity security investments and exchangeable senior notes, non-GAAP diluted earnings per ordinary share and per ADS was RMB 1.13, or U.S. $0.18 for the second quarter. As of June 30, 2021, the balance of cash and cash equivalents restricted cash, short-term investments held to maturity time deposits and financial products with R&D 75 billion or U.S. $12 billion. Turning to the third quarter of 2021, we would like to share some recent colors of our businesses. The growth momentum of the China's domestic market continues to carry over to July, especially for regional and local travel. Our domestic hotel bookings have grown by more than 20% and domestic air revenues has grown by double digits when compared to 2019. As cross province travel was disrupted in August, domestic China hotel occupancy rate and air ticket bookings decreased by more than 50% compared to the same period in 2019. Local vacation travel was less affected, and our local hotel reservations maintained about 30% growth compared with 2019. During September, the COVID situation was generally under control in most parts of China and domestic situation is gradually recovering. In the past, in the autumn festival, automatic hotel reservations reached the double-digit growth compared to the same period in 2019 and domestic air ticket business was on track to full recovery. Due to uncertainties over changing COVID-related travel restrictions, travel booking window has shrunk and travel radius has shortened significantly. We expect to see more travel booking for national holidays in the following weeks. On the other hand, while outbound travel is still muted, Europe and the U.S. market have seen a significant improvement and our global brands start to recover sequentially. During challenging times, we'll be adaptive and responsive to the changing market conditions and strive to grow our market share while continue to maintain a lean operation. With that, operator, please open the line for questions. Operator: Thank you. Your first question comes from Ronald Keung of Goldman Sachs. Please go ahead. Ronald Keung: Thank you, thank you, James, Jane, Cindy, and Michelle. My question is more on the international recovery; just want to hear what is our strategy for international, particularly how we see the recovery trajectory. Firstly, for Pure International that you've shared some encouraging signs for Skyscanner and I believe Trip.com, and then how we think about the outbound, which at this point will -- has been slower than the Pure International, just want to hear our strategy there? Thank you. James Liang: We're still pushing ahead with our local focus, global vision strategy. China domestic travel market is generally riding our growth trajectory despite short-term COVID interruptions. We believe the continuing growth in domestic markets will gradually make up for the muted outbound travel. At the same time, thanks to rising vaccination rates and the relaxed travel restrictions, overseas markets have seen promising recovery. Our overseas brands such as Skyscanner and Trip.com showed quick sequential improvements in recent weeks. Europe and APAC together accounts for about 60% of the world's total air traffic, we therefore have a huge growth potential in these overseas markets. Currently, we've already exhibit a strong competitiveness in domestic China and Asian air markets. Meanwhile, our overseas brands will continue to upgrade products and services offering to strengthen our competitiveness in our European markets. Our focused efforts will enable us to gain additional market share and a solid foundation for sustainable growth beyond COVID in the long run. With the vaccination rates continue to rise globally, we have full confidence in the resumption of international travel. In the lead time, our team continue to enhance the fundamentals in terms of price product service and app user experience for overseas users. With that, we will be best positioned to capture the pent-up travel demand when international travel reopens. Ronald Keung: Thank you, James. Jane Sun: Thank you. Operator: Thank you. Your next question comes from Alex Yao of JPMorgan. Please go ahead. Alex Yao: Thank you, management. I have a couple of questions on the content operation. How do you guys incubate the content supply ecosystem and then what's the progress on advertising monetization on content operation? Thank you. Cindy Wang: Thank you, Alex. We have been making quite good progress on our content ecosystem development by following on our three step strategy. First, we have further enriched the content offerings on our platform. Our total content bookings in second quarter nearly doubled compared with the previous quarter. And the number of sites, KOLs also increased nearly 50% sequentially in the second quarter. And second, we are encouraged to see better user engagement through content platform. For example, in the second quarter, we are glad to see an average of 35% of our app unique visitors viewed content related channels with the peak value reached over 40% during the holiday. Meanwhile, our diverse content format as they may increase in traction from new users, the search -- and the search. Our content to transaction conversion was on the rise as we continue to improve infrastructure development. We are happy to see that over 180 leading travel business have signed up travel Star Hub channel, which is our new travel marketing hub launched in April. Top Star Hub players have seen their conversion rates improving. As we are the leading travel transaction platform in China and many of our users have already got strong travel desire and when they come to our platform, our strong product development capabilities make content to transaction conversion more easier and frictionless. We have built a technology and product team for our content strategy, which were mainly leveraging our efforts in infrastructure, and we will carefully evaluate the future investment for the long-term -- for this long-term opportunity. Thank you. Operator: Thank you. Your next question comes from Alex Poon of Morgan Stanley. Please go ahead. Alex Poon: Thank you, management for taking my question. My question is regarding our margins. Can management break down the non-GAAP operating margin of 11.7% in second quarter into China business, Skyscanner and Trip.com separately? And assuming our China business that revenue stays around the same level, can our China margin continue to improve on the same revenue level? And for Skyscanner, at what level of revenue of 2019 level Skyscanner margin can go back to 20% margin level in 2019? Thank you. Cindy Wang: Thank you, Alex. With regard to the margin, we think we -- we still talk -- we are still targeting a very healthy 20% to 30% normalized margin level. But as the second quarter for the domestic travel business since it's almost fully recovered, so we have already maintained a very healthy margin for the domestic business, while for the international part, for example, Skyscanner, as they are still suffering some losses, but as we already see some pent-up demand and normalized travel demand, especially starting from Europe and U.S. markets, we already see very healthy sequential increase for our Pure International business. I think as well as the travel demand will recover or gradually recover, our international business including Skyscanner will -- going back to a normalized margin level. Thank you. Operator: Thank you. Your next question comes from Thomas Chong of Jefferies. Please go ahead. Thomas Chong: Hi, good morning. Thanks, management for taking my questions. I have a question regarding the hotel business. Can management comment about the competitive landscape in the lower tier cities? And how we should think about the overseas accommodation as well in the second half, any qualitative color will be great? Thank you. Jane Sun: Yes, for the hotel platform, we further penetrate into the second tier and lower tier cities, many of the contributors work well together. Our transportation business also cross-sell into our lower tier cities very significantly. The cross-sell ratio during this year have increased compared to pre-COVID level by 20%. We also have seen Generation Z have used our product significantly coming from all the cities around China. Into the overseas hotels with the recovery in Europe and United States, we have seen the vaccination rate also increases. And recently, U.S. have announced to open to many of the European countries, and with that our air transportation, our business unit will further increase the volume, which will also help us to lift our sales for overall products. Our competitiveness in providing the comprehensive product offerings, as well as a high service level with app usage will enable us to gain market share in the growing market overseas. Thank you. Operator: Thank you. Your next question comes from Yulin Zhong of Haitong International. Please go ahead. Yulin Zhong: Thanks. Thanks, James, Jane, Cindy, and Michelle for taking my question. My question is regarding the regulation. Could you share with us any thoughts on the regulatory environment and any potential regulatory pressure to your sector or your company, for example, on your collaboration with hotels, your take-rate, and your cross-sale rate, et cetera? Thank you. Cindy Wang: Thank you. We believe the tightened regulations will bring positive impact to the internet industry, especially in the long run in terms of bidding malpractices, encouraging innovation and fostering a sustainable and healthy environment. Trip.com Group has long benefited from an authorized and regulated environment to cultivate our overgrowth in an efficient manner in the past 22 years. We strongly support the proposed regulations in the market, which we believe we will event -- which will eventually create value to all the stakeholders. In terms of different potential regulation with -- at this moment, we are not considered to have a significant impact to our existing business practices. And going forward, we will continuously to follow all the rules and regulations in both domestic China as well as for the international markets. Thank you. Operator: Thank you. Your next question comes from Brian Gong of Citi. Please go ahead. Brian Gong: Yes, thanks, management for taking my question. So my question is about competitive landscape. With recent regulatory change and there's some regional resurgence of cases, do you see any material change on competitive landscape and any behavioral change for our key competitor? Thank you. Jane Sun: Yes, I think we fully support the new rules and regulation. As Cindy said, our company has grown in the past two decades in a very healthy and a regulated environment. And going forward, we believe the new policy and regulation will further fostering a very healthy growth in the industry. So I think everyone is studying these rules and regulation very carefully. And we believe in a new environment that will enable everyone to operate in a very transparent and a fair environment which we have confidence in. Thank you. Brian Gong: Okay, thank you. Operator: Thank you. There are no further questions at this time. I'll now hand it back to Michelle Qi for closing remarks. Michelle Qi: Thank you. Thanks, everyone for joining us today. You can find the transcript and webcast of today's call on investors.trip.com. We look forward to speaking with you on the third quarter 2021 earnings call. Thank you, and have a good day. Jane Sun: 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.
