TRIPADVISOR, INC. (TRIP): what the price requires
At today's price, TRIPADVISOR, INC. (TRIP) is priced for -0.3% growth. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/TRIP
Headline
| Field | Value |
|---|---|
| Ticker | TRIP |
| Company | TRIPADVISOR, INC. |
| Sector / Industry | Technology / Software |
| Current price | $14.42/sh |
| Composition | Experiences 49% / Hotels and Other 40% / TheFork 12% |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin needed | 1.2% |
| Operating margin today | 4.7% |
| Margin compression implied | -3.5pp |
| Implied growth | -0.3% |
| Multiple paid | 14x operating income |
The operating-margin requirement is derived from the framework's value band at year 12, a separately labeled basis from the headline growth/duration solve.
Solve inputs: computed at a 8.3% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~6.1pp.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | +0.05σ |
| cohort percentile (of 177 peers) | 18 |
| implied end-window share | 0% |
Valuation X-Ray
The price is justified by relative-multiple and growth-DCF; asset-based/earnings-power land below the price.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 11.08x | 4 | expensive |
| Earnings | 1.86x | 4 | expensive |
| Relative | 0.41x | 3 | justifies |
| Growth | 0.77x | 3 | justifies |
Families that justify the price: Relative, Growth Families that call it expensive: Asset, Earnings
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 5.8%); the inversion above states its own rate.
Per-Model Detail (n=14)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $42.20 | 0.34x | yes | FCF base $0.2B, growth 2% (input: historical growth), terminal g 2.2%, WACC 5.8%, 5yr projection |
| DCF Exit Multiple | Growth | $18.63 | 0.77x | yes | Exit EV/EBITDA: 8.6x / 10.6x / 12.6x (bear / base = today's held flat / bull), 5yr |
| Relative Valuation | Relative | $17.52 | 0.82x | yes | P/E 51.35x (blended: static sector reference 35x + trailing (TTM) 89x), scenarios: 43.5x / 51.4x / 59.2x (bear / base = reference held flat / bull), EV/EBITDA 19.23x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $1.74 | 8.29x | yes | BV/sh $5.40, ROE (TTM) 3.0%, ke 9.3% |
| Two-Stage Excess Return | Asset | $1.04 | 13.87x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $10.02 | 1.44x | yes | Rev $1.9B, growth 2% (input: historical growth; tapered), Terminal P/S: 0.8x / 0.9x / 1.0x (bear / base = today's held flat / bull, cap 8x) |
| Growth-Adjusted P/E | Relative | — | — | no | — |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $8.99 | 1.60x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $0.08B × (1−21%) / WACC 5.8% → EPV (no growth) |
| Residual Income | Asset | $0.77 | 18.73x | yes | BV $5.40 + 5yr PV of (ROE (TTM) 3.0% − Kₑ 9.3%) × BV; BV grows 1.9%/yr |
| Graham Number | Asset | $3.66 | 3.94x | yes | √(22.5 × EPS $0.11 × BVPS $5.40) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $35.09 | 0.41x | yes | EBITDA $0.17B × sector EV/EBITDA 25.0x |
| FCF Yield | Earnings | $16.24 | 0.89x | yes | FCF $181.3M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $6.81 | 2.12x | yes | SBC-adj FCF $0.08B (FCF $0.18B − SBC $0.10B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $0.09 | 160.22x | yes | EPS $0.11 × (8.5 + 2×-5.0%) × (4.4 / 5.3%) (excluded from median) |
| ROIC-Justified P/B | Asset | — | — | no | — |
| P/Sales Sector | Relative | $129.98 | 0.11x | yes | Revenue $1.88B × sector P/S 8.0x |
| PEG Fair Value | Relative | — | — | no | — |
| Earnings Yield | Earnings | $1.19 | 12.12x | yes | EPS $0.11 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt | $91.3m |
| Net debt / NOPAT (after-tax) | 1.31x |
| Net debt / operating income (pre-tax) | 1.03x |
| Interest coverage | 1.4x |
| Share count CAGR (buyback) | -4.6% |
| Burning cash | no |
Bullet Takeaways
- Tripadvisor is three businesses moving in different directions: Experiences grew revenue 8% and TheFork grew 23% in the March quarter while the legacy Hotels and Other segment fell 20%, and the market pays $1.6 billion, under one times sales, for the netted result.
- The structural risk is traffic and coverage: the 10-K concedes that "We rely on internet search engines, metasearch engines and application marketplaces to drive traffic to our platform, certain providers of which offer products and services that compete directly with ours", and operating income currently covers interest only about one time.
- Watch the TheFork monetization process announced in February, the Starboard cooperation agreement adding four directors through the 2026 annual meeting, and the second-quarter print, where Hotels and Other is guided down 21% to 24%.
Bull Case
Start with everything wrong, because the bear case here is not subtle. The legacy hotel-metasearch business shrank 20% year over year in the March quarter, the company posted a $32.4 million net loss, operating income barely covers interest, and the composite distress gauge sits in its warning zone. An investor could stop reading there. The question is whether the price already knows all of it, and the arithmetic says yes: at $13.98 the market values the whole company at $1.6 billion, under one times sales, and the price actually embeds a decline of roughly 3.6% per year in Experiences operating income over five years. The market is not paying for a turnaround. It is paying for managed decay, and anything better than decay is upside.
The data increasingly undermines the decay assumption. Experiences, now the largest segment at $167.9 million of March-quarter revenue, grew 8%, with bookings up 11% despite roughly 3 percentage points of macro drag, and Viator's gross booking value ran near 19% growth in January and February before March softness. TheFork grew revenue 23% to $57.3 million and turned profitable at $4.6 million of adjusted EBITDA. Even the melting hotel segment is being managed for cash, with second-quarter margins guided to 22% to 24% on the smaller base. Meanwhile the company generated $181.6 million of trailing free cash flow, an 11.25% yield on the market cap, repaid its $345.4 million convertible note at maturity in April with cash rather than dilution, and repurchased $90 million of stock over the trailing year.
Then there is the corporate-event layer, which exists precisely because the equity looks mispriced against the parts. Starboard Value took a significant stake, urged the board to explore a sale, and secured a cooperation agreement in March adding four independent directors. The company separately launched a process to explore monetizing TheFork, a growing, newly profitable European reservations platform whose value is invisible inside a consolidated income statement showing losses. Management's stated strategy is the same story told internally: "Strengthening direct traveler relationships through repeat engagement and mobile app usage" while "maintaining disciplined financial and operating practices to balance growth investments with margin expansion and long-term shareholder value". At under one times sales, the bull case does not require believing in Tripadvisor's renaissance; it requires believing someone, an acquirer, an activist, or simply the cash flow, forces the value out.
Bear Case
The price rests on a specific sequence of future events, and the most fragile link is Experiences profitability. The thesis requires Viator to keep compounding bookings fast enough to replace the shrinking hotel business AND to stop losing money while doing it. Neither is currently true: Experiences posted an adjusted EBITDA loss of $19.2 million in the March quarter even as revenue grew 8%, and its growth engine decelerated within the quarter, with gross booking value slowing from roughly 19% in January and February to mid-single digits in March on macro softness. A take-rate business that loses money at scale during the good part of the travel cycle has not yet earned the benefit of the doubt the transition story requires.
The funding side of the transition is the second dependency. Hotels and Other, the segment that pays the bills, fell 20% in the March quarter and is guided down another 21% to 24% in the second. That decline is structural, not cyclical: the 10-K names the mechanism, warning that a "search engine changes its algorithms in a manner that negatively affects the search engine ranking of our websites" can hit the business, and that "Google and other large, established companies with substantial resources" compete directly for the same travel intent. As answer engines absorb the discovery queries that once landed on Tripadvisor pages, the free-traffic subsidy that made metasearch profitable erodes with them. The company is racing to build direct relationships before the referral spigot closes, and the 20% decline says the spigot is closing faster.
The balance sheet leaves little room for the race to run long. Operating income covers interest only about one time, debt stands at 1.9x equity, and the composite distress gauge sits in its warning zone. Reported free cash flow of $181.6 million flatters the picture: roughly $100 million of it is stock-based compensation, so owner-adjusted cash generation is nearer $80 million, and the company spent $90 million on buybacks over the trailing year, more than that adjusted figure, while headline net income was just $20 million. The sale-process hope embedded in the Starboard narrative cuts both ways, because if the strategic review concludes without a transaction, the equity is left holding a melting core, an unprofitable growth segment, and leverage priced for the optimistic branch.
Valuation
The bet at $13.98 (July 10, 2026) is unusually pessimistic for a company with a growth segment. Inverting the price shows the market paying for Experiences, the segment carrying the premium and the future, to shrink operating income by roughly 3.6% per year for five years. The filing defines that segment as the combination of Viator and the Tripadvisor-branded experiences operations, and it grew revenue 8% in the March quarter. When a price embeds decline for a segment that is currently growing, the market is either forecasting the deceleration continues past zero or simply refusing to pay for the transition until it proves out.
The method families split in a shape that matches that skepticism. Peer-multiple approaches land well above the price, with the stock trading at roughly 40% of what sector multiples would support, and growth-based cash-flow methods also sit about 20% above it; the company trades at 10.3x EV/EBITDA against a software-sector median of 25x and 0.86x sales. Pull in the other direction and the picture inverts: earnings-power methods put the price at twice what demonstrated profits justify, and asset-based methods far higher still, because trailing net income is only $20 million and the balance sheet carries real debt. The spread is the diagnosis: cheap on revenue and cash flow, expensive on proven profit. Which family is right depends entirely on whether Experiences and TheFork, which grew 23% to $57.3 million with positive adjusted EBITDA in the March quarter, convert growth into durable operating income.
Solvency is the constraint the equity price shrugs at. Operating income covers interest only about one time, and the composite distress gauge reads in its warning zone, though the company generated $181.6 million of trailing free cash flow, kept it positive in three of four quarters, and retired its $345.4 million convertible note at maturity in April with cash. The stock-based compensation load of roughly $100 million a year sits between reported cash flow and what accrues to owners. The most decisive fact is the simplest: at $1.6 billion the market prices the whole platform below one year of revenue, and the strategic review of TheFork plus the activist-reset board are live tests of whether that price survives contact with an outside bidder.
Catalysts
The corporate-event calendar is unusually full. Starboard Value, after a February 17 letter citing prolonged underperformance and urging the board to explore a sale, reached a cooperation agreement on March 23, 2026 that seated two independent directors immediately, with two more joining at the 2026 annual meeting. The company separately announced on February 12 a process to explore monetization of TheFork, its European restaurant-reservations platform, which grew revenue 23% to $57.3 million in the March quarter and turned profitable. Any outcome of either process, a TheFork sale, a broader strategic transaction, or an explicit end to the review, is a repricing event for a stock trading under one times sales.
The operating calendar runs through the summer travel season. The first quarter showed the transition's tension: revenue fell 4% to $382.4 million with a $32.4 million net loss, Experiences grew 8% with bookings up 11%, and Viator's booking growth slowed from roughly 19% in January and February to mid-single digits in March on macro disruption. The second-quarter print tests whether that March slowdown was weather or trend, against guidance for Hotels and Other revenue down 21% to 24% with segment margins of 22% to 24%. The balance-sheet overhang shrank in April when the company repaid its $345.4 million convertible note at maturity, so the remaining question each quarter is whether free cash flow, $181.6 million trailing, holds up while the legacy segment shrinks.
Peer Cohorts (Per Segment, With Filing Citations)
Experiences (reported)
- SPGI (S&P Global Inc.)
- (no filing in the citation store)
- MSCI (MSCI INC.)
- (no filing in the citation store)
- FDS (FACTSET RESEARCH SYSTEMS INC.)
- (no filing in the citation store)
- ICE (Intercontinental Exchange Inc)
- (no filing in the citation store)
- VRSK (Verisk Analytics, Inc.)
- (no filing in the citation store)
Hotels and Other (reported)
- EXPE (EXPEDIA GROUP, INC.)
- (no filing in the citation store)
- BKNG (Booking Holdings Inc.)
- (no filing in the citation store)
- YELP (YELP INC.)
- (no filing in the citation store)
- ABNB (Airbnb, Inc.)
- (no filing in the citation store)
TheFork (reported)
- EXPE (EXPEDIA GROUP, INC.)
- (no filing in the citation store)
- BKNG (Booking Holdings Inc.)
- (no filing in the citation store)
- ABNB (Airbnb, Inc.)
- (no filing in the citation store)
- YELP (YELP INC.)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.
Sources
Q1 2026 earnings release, May 2026 · company announcements, February-March 2026 · Q1 2026 earnings call, May 7, 2026 · company 8-K, April 2026 · TipRanks and company announcement, March 23, 2026 · company announcement, February 12, 2026 · TipRanks, March 2026 · company announcement and Q1 2026 results, May 2026 · Investing.com Q1 2026 coverage, May 2026