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Will Currency Hurt TripAdvisor's (TRIP) Earnings Again in Q4?

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TripAdvisor Inc.TRIP is slated to report fourth-quarter 2015 results on Feb 11. Last quarter, the company reported a 4.26% negative earnings surprise.

Let's see how things are shaping up for this announcement.

Factors to Consider

TripAdvisor's third-quarter earnings missed the Zacks Consensus Estimate due to higher sales and marketing costs as well as advertising expenses. Also, adverse currency movements led to weaker-than-expected sales growth. These factors are likely to impact fourth-quarter results as well.

However, revenues of $415.0 million were up 2.5% sequentially and 17.2% year over year, driven by strength in click-based and display-based advertising businesses.

The company's solid fundamentals, various growth initiatives including Instant Booking, strong focus on developing its mobile products, expansion into international restaurant reservation and improvement in user growth and engagement, especially on mobile devices, are expected to aid fourth-quarter results.

Nevertheless, intensifying competition from Priceline, Expedia and Alphabet is expected to hurt results in the to-be-reported quarter.

Earnings Whispers

Our proven model does not conclusively show that TripAdvisor will beat earnings estimates this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) 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 25 cents. Hence, the difference is 0.00%.

Zacks Rank : TripAdvisor has a Zacks Rank #4 (Sell).

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

Stocks to Consider

Here are some stocks, which you may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:

Jack in the Box Inc. JACK , with an Earnings ESP of +1.94% and a Zacks Rank #1.

ARRIS International plc ARRS , with an Earnings ESP of +4.88% and a Zacks Rank #1.

AMN Healthcare Services Inc. AHS , with an Earnings ESP of +2.44% and a Zacks Rank #1.

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ARRIS INTL PLC (ARRS): Free Stock Analysis Report

JACK IN THE BOX (JACK): Free Stock Analysis Report

AMN HLTHCR SVCS (AHS): Free Stock Analysis Report

TRIPADVISOR INC (TRIP): Free Stock Analysis Report

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


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

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