Reportedly, TripAdvisor Inc.TRIP , an online travel research company, recently acquired Portuguese booking website - BestTables. The financial terms of the deal have been kept confidential.
BestTables allows diners to choose and book a restaurant based on their preferred location, availability, price, type of cuisine and special offers. The company also operates in Brazil and offers reservations at around 1,200 restaurants in the Portuguese and Brazilian markets.
The acquisition will complement TripAdvisor's existing restaurant offering by providing information about hotel bookings, and reviews and opinions about restaurants. The company will further expand TripAdvisor's presence in Europe as well as market share. This will improve efficiency, thereby expanding the company's user base, improving traffic, hotel shoppers and profits.
TripAdvisor has an aggressive merger and acquisition strategy. In Feb 2015, the company acquired a startup ZeTrip, Inc. and its travel journal application, Rove, to boost its mobile offerings. In January, the company took over online restaurant booking and review websites - Iens.nl and Seatme.nl - operating in the Netherlands. In May 2014, the company bought Paris-based online travel research company - LaFourchette - to enhance its restaurant offerings by providing details such as restaurant discounts and booking information on mobile.
Additionally, in the same month, it acquired TripBod, a startup which connects travelers with local experts; followed by Vacation Home Rentals for an undisclosed sum. Other takeovers in 2013 include GateGuru, a flight and airport information mobile app, Oyster.com, TinyPost, JetSetter and CruiseWise.
TripAdvisor - the world's largest online travel research company - has built a strong portfolio through acquisitions. This, in turn, has increased page views per visitor since users now spend more time on its website.
TripAdvisor continues to witness robust top-line growth in every quarter. The company delivered a decent fourth-quarter 2014, with revenues of $288.0 million, decreasing 18% sequentially but increasing 35.2% year over year. Also, earnings of 27 cents missed the Zacks Consensus Estimate by 3 cents.
Over the long term, the company is well positioned to grow given its expanding user base, improving margins and increasing monetization of social and mobile platforms. However, macro headwinds, continued investments and increasing competition from other players in the online travel market remain the headwinds.
Stocks to consider
Currently, TripAdvisor has a Zacks Rank #4 (Sell). Some better-ranked stocks are Everyday Health, Inc. EVDY , Changyou.com Limited CYOU and Spark Networks, Inc. LOV , all sporting a Zacks Rank #1 (Strong Buy).