Trip.com logged a 0.9% change during today's afternoon session, and is now trading at a price of $33.78 per share.
Over the last year, Trip.com logged a -3.8% change, with its stock price reaching a high of $43.59 and a low of $30.7. Over the same period, the stock underperformed the S&P 500 index by -26.4%. As of April 2023, the company's 50-day average price was $34.07. Trip.com Group Limited operates as a travel service provider for accommodation reservation, transportation ticketing, packaged tours and in-destination, corporate travel management, and other travel-related services in China and internationally. Based in Shanghai, China, the large-cap Consumer Discretionary company has 32,202 full time employees. Trip.com has not offered a regular dividend during the last year.
The Company's Revenues Are Declining:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (MM) | $4,524 | $5,129 | $5,129 | $3,143 | $3,143 | $2,909 |
| Revenue Growth | n/a | 13.37% | 0.0% | -38.72% | 0.0% | -7.45% |
| Operating Margins | 12% | 25% | 25% | -2% | 12% | 13% |
| Net Margins | 49% | 144% | 144% | -3% | 45% | 48% |
| Net Income (MM) | $2,207 | $7,384 | $7,384 | -$86 | $1,403 | $1,403 |
| Net Interest Expense (MM) | $219 | $521 | $521 | $263 | $292 | $292 |
| Depreciation & Amort. (MM) | $79 | $94 | $121 | $121 | $113 | $92 |
| Earnings Per Share | $3.84 | $11.5 | $11.5 | -$0.14 | $2.14 | $2.14 |
| EPS Growth | n/a | 199.48% | 0.0% | -101.22% | 1628.57% | 0.0% |
| Diluted Shares (MM) | 574 | 642 | 642 | 634 | 657 | 657 |
| Free Cash Flow (MM) | $988 | $937 | $937 | $299 | $299 | $308 |
| Capital Expenditures (MM) | $98 | $118 | $118 | $89 | $89 | $72 |
| Current Ratio | 1.15 | 1.15 | 0.98 | 1.0 | 1.0 | 1.0 |
| Total Debt (MM) | $8,765 | $11,556 | $7,876 | $8,285 | $7,945 | $6,605 |
| Net Debt / EBITDA | 9.12 | 6.03 | 3.52 | 110.11 | 9.71 | 8.68 |
Trip.com's financial statements include several red flags such as declining revenues and decreasing reinvestment in the business, declining EPS growth, and irregular cash flows. Additionally, the firm has a highly leveraged balance sheet. On the other hand, the company has decent operating margins with a stable trend working in its favor.
Trip.com Is Too Expensive at Current Levels:
Trip.com has a trailing twelve month P/E ratio of 25.6, compared to an average of 22.96 for the Consumer Discretionary sector. Based on its EPS guidance of $2.38, the company has a forward P/E ratio of 14.3. The -6.6% compound average growth rate of Trip.com's historical and projected earnings per share yields a PEG ratio of -3.88. This indicates that its shares are overvalued.In contrast, the market is likely undervaluing Trip.com in terms of its equity because its P/B ratio is 0.18 while the sector average is 4.24. The company's shares are currently trading -2.6% below their Graham number.
Analysts Give Trip.com an Average Rating of Buy:
The 28 analysts following Trip.com have set target prices ranging from $40.99 to $68.99 per share, for an average of $50.64 with a buy rating. As of April 2023, the company is trading -32.7% away from its average target price, indicating that there is an analyst consensus of strong upside potential.
The largest shareholder is Capital World Investors, whose 4% stake in the company is worth $924,220,901.
