Why TripAdvisor Stock Jumped 11% This Week
What happened
TripAdvisor (NASDAQ: TRIP) shareholders beat the market this week, with shares rising 10% through Thursday trading compared to a 2.3% decline in the S&P 500, according to data provided by S&P Global Market Intelligence. The rally didn't push the travel and vacation booking specialist into positive territory for the year, but did erase a small portion of recent losses.
The surge came as many investors turned less pessimistic about the travel industry in the wake of geopolitical upheaval in Europe.
So what
TripAdvisor maintains one of the world's biggest travel booking platforms, with around 450 million monthly visitors who shop for hotel rooms, flights, cruises, and travel activities. That fact makes its business highly sensitive to slowing economic growth and geopolitical instability, which tend to reduce demand for discretionary services like vacation travel.
Fears about these issues hurting TripAdvisor's expected recovery in 2022 pressured the stock in early March, but shares benefited from a bit more optimism this week.
Image source: Getty Images.
Now what
There's no telling how developments might unfold in the conflict, or whether TripAdvisor will see weak demand that persists deeper into 2022. Management said back in February that it was expecting a significant rebound in the global travel market due to pent-up demand following two consecutive years of pandemic-related weakness.
That recovery might be pushed deeper into the future, but investors won't know key details on demand trends until TripAdvisor issues its next operating update, likely in early May. Until then, expect shares to continue swinging in response to shifting Wall Street sentiment about global growth and political instability in Europe.
10 stocks we like better than TripAdvisor
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and TripAdvisor wasn't one of them! That's right -- they think these 10 stocks are even better buys.
*Stock Advisor returns as of March 3, 2022
Demitri Kalogeropoulos owns TripAdvisor. The Motley Fool owns and recommends TripAdvisor. The Motley Fool has a disclosure policy.
