Today we're going to take a closer look at Large-Cap Real Estate company Trip.com, whose shares are currently trading at $75.56. We've been asking ourselves whether the company is under or over valued at today's prices... let's perform a brief value analysis to find out!
an Exceptionally Low P/B Ratio but Priced at a Premium:
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. The company belongs to the Real Estate sector, which has an average price to earnings (P/E) ratio of 27.31 and an average price to book (P/B) ratio of 1.94. In contrast, Trip.com has a trailing 12 month P/E ratio of 21.0 and a P/B ratio of 0.34.
Trip.com has moved 12.4% over the last year compared to 17.1% for the S&P 500 — a difference of -4.8%. Trip.com has a 52 week high of $78.65 and a 52 week low of $51.35.
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.
