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Understanding the Basics of TCOM Stock

Trip.com logged a -0.3% change during today's morning session, and is now trading at a price of $74.83 per share.

Trip.com returned gains of 59.2% last year, with its stock price reaching a high of $77.18 and a low of $46.2. Over the same period, the stock outperformed the S&P 500 index by 44.1%. More recently, the company's 50-day average price was $61.86. Trip.com Group Limited, through its subsidiaries, operates as a travel service provider for accommodation reservation, transportation ticketing, packaged tours, in-destination, corporate travel management, and other travel-related services in China and internationally. Based in Singapore, Singapore, the Large-Cap Real Estate company has 41,073 full time employees. Trip.com has not offered a dividend during the last year.

Wider Gross Margins Than the Industry Average of 29.19%:

2019 2020 2021 2022 2023 2024
Revenue (M) $5,122 $2,807 $3,142 $2,907 $6,269 $7,302
Gross Margins 79% 78% 77% 78% 82% 81%
Net Margins 20% -18% -3% 7% 22% 32%
Net Income (M) $1,006 -$497 -$86 $206 $1,397 $2,338
Net Interest Expense (M) $241 $263 $246 $219 $291 $238
Depreciation & Amort. (M) $94 $121 $113 $92 $88 $90
Diluted Shares (M) 642 601 634 657 671 689
Earnings Per Share $1.57 -$0.83 -$0.14 $0.31 $2.08 $3.39
EPS Growth n/a -152.87% 83.13% 321.43% 570.97% 62.98%
Free Cash Flow (M) $937 -$669 $299 $308 $3,013 $2,611
CAPEX (M) $118 $81 $89 $72 $85 $81
Total Debt (M) $7,189 $8,641 $6,263 $17,837 $22,742 $11,362
Net Debt / EBITDA 5.3 -60.49 -29.19 143.66 10.03 2.32
Current Ratio 0.98 0.99 1.0 1.0 1.23 1.51

Trip.com has generally positive cash flows and wider gross margins than its peer group. Additionally, the company's financial statements display a strong EPS growth trend and a decent current ratio of 1.51. However, the firm has a highly leveraged balance sheet. Finally, we note that Trip.com has growing revenues and decreasing reinvestment in the business.

an Exceptionally Low P/B Ratio but Its Shares Are Expensive:

Trip.com has a trailing twelve month P/E ratio of 17.1, compared to an average of 27.31 for the Real Estate sector. Based on its EPS guidance of $3.64, the company has a forward P/E ratio of 17.0. The 12.8% compound average growth rate of Trip.com's historical and projected earnings per share yields a PEG ratio of 1.34. This implies that the shares are fairly valued. In contrast, the market is likely undervaluing Trip.com in terms of its equity because its P/B ratio is 0.33 while the sector average is 1.94. The company's shares are currently trading 61.4% below their Graham number.

Trip.com Has an Analyst Consensus of Some Upside Potential:

The 29 analysts following Trip.com have set target prices ranging from $70.2474 to $97.34289 per share, for an average of $80.08 with a buy rating. The company is trading -6.6% away from its average target price, indicating that there is an analyst consensus of some upside potential.

Trip.com has a very low short interest because 1.7% of the company's shares are sold short. Institutions own 29.0% of the company's shares, and the insider ownership rate stands at 0.0%, suggesting a small amount of insider investors. The largest shareholder is Capital World Investors, whose 6% stake in the company is worth $2,692,001,106.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.

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