Trip.com shares moved 54.46% over the last 52 weeks, with a high of $40.17 and a low of $18.46. During this time, the stock outperformed the S&P 500 index by 67.67%. As of January 2022, the company's 50-day average price is $37.0. Trip.com Group Limited is a travel service provider for accommodation booking, transportation ticketing, destination and package tours, corporate travel management and other travel-related services in China and internationally. The large-cap Consumer Discretionary company is based in Shanghai, China. Trip.com has not offered any dividends in the last year.
Exceptional EPS Growth with a Highly Leveraged Balance Sheet:
| 2019-12-31 | 2020-12-31 | 2021-12-31 | 2022-12-31 | |
|---|---|---|---|---|
| Revenue (MM) | $35,666 | $18,316 | $20,023 | $20,039 |
| Revenue Growth | n/a | -48.65% | 9.32% | 0.08% |
| Gross Margins | 79.33% | 77.99% | 77.04% | 77.48% |
| Gross Margins Growth | n/a | -1.69% | -1.22% | 0.57% |
| Operating Margins | 14.13% | -7.77% | -7.05% | 0.44% |
| Operating Margins Growth | n/a | -154.99% | 9.27% | 106.24% |
| Net Margins | 19.66% | -17.73% | -2.75% | 7.0% |
| Net Margins Growth | n/a | -190.18% | 84.49% | 354.55% |
| Earnings Per Share | $10.92 | -$5.4 | -$0.87 | $2.21 |
| EPS Growth | n/a | -149.45% | 83.89% | 354.02% |
| Diluted Shares (MM) | 642 | 601 | 634 | 634 |
| Capital Expenditures (MM) | $834 | $532 | $571 | $0 |
| Net Debt / EBITDA | 2.54 | 99.22 | 11.68 | 7.6 |
Trip.com Is Overvalued:
Compared to the Consumer Discretionary sector's average of 22.33, Trip.com has a trailing twelve month P/E ratio of 116.84 and, according to its EPS guidance of 1.83, an expected P/E ratio of 19.79. Trip.com's PEG ratio is 0.8 based on its 145.8% annual average growth rate of historical and projected earnings per share. However, we believe that it is more prudent to calculate the PEG ratio using the broader market's 5-year expected EPS growth rate of 13.05%, because the growth rate implied by Trip.com's past and expected EPS is probably not sustainable. This more prudent approach shows a PEG ratio of 8.95, which suggests that the company's shares are actually overvalued.
However, Trip.com is likely undervalued in terms of its equity because its P/B ratio is 1.407 compared to its sector average of 3.12. The company's shares are currently trading -56.21% below their Graham number, implying there is a margin of safety for the stock. The Graham number is calculated according to the formula:
√(22.5 * 5-year average EPS * book value per share) = √(22.5 * 1.76 * 172.77) = $82.71
Trip.com Is the Subject of Mixed Market Indicators:
27 analysts are following Trip.com and have set target prices ranging from $34.25 to $58.43 per share. On average, they have given the company a rating of buy. At the current price of $36.22, TCOM is trading -23.08% away from its average analyst target price of $47.09 per share, implying an analyst consensus of strong upside potential for the stock.
