NEW YORK (TheStreet) -- TripAdvisor (TRIP) shares were upgraded to "equal weight" from "underweight" by analysts at Evercore Partners (EVR) on Friday while raising its price target to $110 from $85.
The upgraded outlook stems from what the firm sees as a shift in the online travel industry following signs that Google (GOOG) has stepped up its efforts in that space.
TripAdvisor shares are flat in pre-market trading after closing trading yesterday flat at $98.29.
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TheStreet Ratings team rates TRIPADVISOR INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate TRIPADVISOR INC (TRIP) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and good cash flow from operations. However, as a counter to these strengths, we find that the company's return on equity has been disappointing."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 7.3%. Since the same quarter one year prior, revenues rose by 30.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 37.02% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Internet & Catalog Retail industry average. The net income increased by 1.5% when compared to the same quarter one year prior, going from $66.99 million to $68.00 million.
- Despite currently having a low debt-to-equity ratio of 0.34, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that TRIP's debt-to-equity ratio is mixed in its results, the company's quick ratio of 2.13 is high and demonstrates strong liquidity.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Internet & Catalog Retail industry and the overall market, TRIPADVISOR INC's return on equity exceeds that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: TRIP Ratings Report
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