TripAdvisor (TRIP) Upgraded From Hold to Buy

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NEW YORK (TheStreet) -- TripAdvisor  (TRIP) has been upgraded by TheStreet Ratings from Hold to Buy with a ratings score of B-.  TheStreet Ratings Team has this to say about their recommendation:

"We rate TRIPADVISOR INC (TRIP) a BUY. 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 robust revenue growth, expanding profit margins, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 13.0%. Since the same quarter one year prior, revenues rose by 38.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • TRIPADVISOR INC' earnings per share from the most recent quarter came in slightly below the year earlier quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, TRIPADVISOR INC increased its bottom line by earning $1.41 versus $1.36 in the prior year. This year, the market expects an improvement in earnings ($1.95 versus $1.41).
  • The gross profit margin for TRIPADVISOR INC is currently very high, coming in at 96.89%. Regardless of TRIP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, TRIP's net profit margin of 15.25% significantly outperformed against the industry.
  • Despite currently having a low debt-to-equity ratio of 0.32, 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 1.81 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

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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