The Needham, MA-based online travel company will struggle with high occupancy rates at hotels, which has created "less favorable economics" for online travel companies, Goldman Sachs said.
The company faces a monetization gap due to its transition to the Instant Booking platform, which could eventually generate revenue of $442 million annually, the firm added.
"Over time Instant Booking should allow TripAdvisor to lower revenue concentration, improve conversion rates, and grow hotel shopper traffic," the firm said.
Additionally, TripAdvisor could be an attractive acquisition target to larger online travel companies, Goldman Sachs said.
Goldman Sachs lowered its price target on the stock to $59 from $68.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
TheStreet Ratings rated this stock as a "buy" with a ratings score of B. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, robust revenue growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins and solid stock price performance. We feel its strengths outweigh the fact that the company shows weak operating cash flow.
You can view the full analysis from the report here: TRIP