Will TripAdvisor (TRIP) Surprise this Earnings Season? - Analyst Blog

By Zacks Equity Research,

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TripAdvisor Inc. ( TRIP ) is set to report second-quarter fiscal 2014 results on Jul 23. Last quarter, the company posted a 4.4% positive surprise. Let's see how things are shaping up for this announcement.

Factors to Consider this Past Quarter

TripAdvisor's first-quarter earnings of 48 cents beat the Zacks Consensus Estimate by a couple of cents on the back of improved global travel market. Also, revenues of $281.0 million were up sequentially as well as from the year-ago period, driven by continued strong hotel shopper growth, increased ad rates and strength across product suite.

However, operating margin of 34.2% was down 410 basis points year over year due to higher expenses incurred in the quarter.

The company's strong fundamentals, focus on improving its mobile products, expansion into international restaurant reservation space and improvement in traffic and hotel shoppers drove strong results in the last quarter.

Earnings Whispers?

Our proven model does not conclusively show that TripAdvisor will beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. That is not the case here as you will see below.

Zacks ESP : Both the Most Accurate estimate and the Zacks Consensus Estimate stand at 53 cents. Hence, the difference is 0.00%.

Zacks Rank : TripAdvisor's Zacks Rank #3 (Hold) when combined with a 0.00% ESP makes surprise prediction difficult.

We caution against stocks with Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

Other Stocks to Consider

You could consider other stocks with a positive Earnings ESP and a favorable Zacks Rank such as:

Gentex Corp. ( GNTX ), with an Earnings ESP of +2.08% and a Zacks Rank #1 (Strong Buy).

Kirby Corporation ( KEX ), with an Earnings ESP of +3.08% and a Zacks Rank #1.

AmSurg Corp. ( AMSG ), with an Earnings ESP of +3.13% and a Zacks Rank #2 (Buy).

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TRIPADVISOR INC (TRIP): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Earnings , Stocks
Referenced Stocks: AMSG , GNTX , TRIP , KEX

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