The investment firm estimates that the Needham, Mass., company's subscription offering, Tripadvisor Plus, could attract 10 million subscribers, "creating an additional $1 billion of high-margin revenue."
Citi called Plus a "thesis changer."
The firm more than doubled its price target on Tripadvisor to $62 a share from $29. At last check TripAdvisor shares rose 9% to $53.80. They are trading around a 52-week high, almost quadruple their 52-week low set not quite a year ago.
A Tripadvisor spokesman told TheStreet that the Plus program is a “$99-a-year service to get access to discounts and perks from over 100,000 hotels and more than 400,000 bookable tour and attractions on Tripadvisor.”
Last week, analysts from Bernstein raised the firm's price target to $45 from $40 while maintaining its outperform rating.
"Despite being in beta stage, confined to certain areas of the U.S., and without a full basket of direct supply, it is still something to get excited about," Clarke said of the Plus subscription product, according to Bloomberg.
Analysts at Stifel maintained their hold rating while increasing the price target to $39 from $26.
"The company expects the product to resonate most, at least initially, with customers booking higher ticket trips, as the value proposition is most obvious for customers who can recoup the $99 annual subscription fee with savings on their initial booking," analyst Logan Thomas said of Tripadvisor Plus.
Evercore ISI analyst Lee Horowitz kept his in-line rating while raising his price target to $35 a share from $29.
“Success of Plus would be a meaningful driver of user monetization on the platform supporting the long-dated bull thesis for TRIP that the platform under-monetizes relative to the size of its user base,” Horowitz said.