Will TripAdvisor (TRIP) Disappoint this Earnings Season?

TripAdvisor Inc.TRIP is slated to report fourth-quarter 2016 results on Feb 15. Last quarter, the company reported a 2.38% negative earnings surprise.

Over the past one year, shares of TripAdvisor underperformed the Zacks categorized Electronic Commerce industry. While the industry gained 57.66%, the stock incurred a loss of 13.19%.

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-than-expected operating expenses. Revenues of $421 million were up 7.7% sequentially and 1.4% year over year. The increase was due to higher click-based and transaction revenue per hotel shopper growth.

For the upcoming fourth-quarter results, the company's solid fundamentals, various growth initiatives including Instant Booking, strong focus on developing mobile products, expansion into international restaurant reservation and improvement in user growth and engagement, especially on mobile devices, will be the likely drivers.

Nevertheless, intensifying competition from Priceline (PCLN), Expedia and Alphabet may act as a dampener.

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: The Most Accurate estimate stands at 16 cents while the Zacks Consensus Estimate is pegged at 18 cents. Hence, the difference is -11.11%. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

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

TripAdvisor, Inc. Price and EPS Surprise

TripAdvisor, Inc. Price and EPS Surprise | TripAdvisor, Inc. Quote

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:

Applied Optoelectronics AAOI with an Earnings ESP of +15.87% and a Zacks Rank #1. You can see the complete list of today's Zacks #1 Rank stocks here .

Century Communities, Inc. CCS with an Earnings ESP of +14.93% and a Zacks Rank #2.

Entergy Corporation ETR with an Earnings ESP of +9.09% and a Zacks Rank #3.

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Entergy Corporation (ETR): Free Stock Analysis Report

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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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