Our Gaming Lodging & Leisure analyst Todd Jordan and Hesham Shaaban, of Internet & Media, are hosting an institutional call on our TripAdvisor (TRIP) long thesis.
The call will take place today, Friday, March 24 at 1pm ET. Email sales@hedgeye.com for more information.
KEY DISCUSSION POINTS
- Inflection Underway: The inflection actually started in January, but no one seemed to care since TRIP guided to flat EBITDA growth for 2017, which it already flagged on the 3Q print. TRIP's 2016 wounds were largely self-inflicted, but are being remedied this year, and we're not talking about the comps. Couple that with a more aggressive marketing budget, and TRIP's Hotel segment could be a 20-30% top-line grower this year.
- Don't Poke The Bear: TRIP realizes that it has been letting TRVG eat its lunch by trying to preserve EBITDA margins while TRVG has essentially been buying/reselling its traffic. TRVG is forcing TRIP to get in the fight, and the flat EBITDA guide means TRIP is serious. The increased marketing spend will only strengthen TRIP's position at the top of the funnel, which is increasingly becoming the most important part of the value chain in this space.
- Macro/Travel – Added Boost: Only reason we're not pairing a TRVG short (yet) against our TRIP long is because the combined backdrop suggests there may be enough room for both TRIP & TRVG. We view the next 6-9 month setup for macro and travel as a rising tide lifts all boats type environment, with the exception confined almost exclusively to same-store hotel operations. Additionally, the management commentary, sentiment, and data we are seeing suggests that leisure travel will continue to be the industry’s largest source of growth – an added kicker for TRIP as it begins reaccelerating its business.
CALL DETAILS
Ping sales@hedgeye.com for more information. Please note if you are not a current subscriber to our institutional research there will be a fee associated with this call.
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