Shares of online travel booking service TripAdvisor (TRIP) - Get Free Report dropped Tuesday after the company reported weak third quarter results and announced that CEO Stephen Kaufer will step down next year.
Kaufer, who co-founded the company in 2000, will stay on until the transition to the new CEO is complete.
"We come to the close of 2021 in a strong position — travelers are returning as we exit the pandemic, exciting new initiatives are well on their way, and we continue to leverage our strengths as we evolve Tripadvisor for the future," Kaufer said in a Monday statement.
The company's board has already initiated an open search for Kaufer's successor with both internal and external candidates being considered.
Shares of TripAdvisor closed 10% lower to $31.33 a share Tuesday.
Analysts at Jefferies remained underweight on the company in a note Tuesday with a $29 price target.
"TRIP delivered 3 disappointing news in the 3Q print: 1) a modest miss (1% on Rev, 5% on Adj EBITDA), 2) no meaningful improvement in 4Q Rev (vs. 3Q21 as % of 2019) when travel recovery is accelerating across the board, and 3) CEO transition in 2022," analyst Brent Thill said.
TripAdvisor reported third-quarter earnings of 16 cents a share on revenue of $303 million. Analysts were expecting earnings of 24 cents a share on revenue of $307.3 million.
"TRIP remains the Co. with the least favorable business model among the travel names we cover and its efforts to move away from meta-search have not brought tangible results yet," Thill said.