TripAdvisor Stock Travels Lower After Q2 Miss

The equity is down over 40% year-over-year

Digital Content Manager
Aug 7, 2020 at 10:02 AM
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The shares of TripAdvisor Inc (NASDAQ: TRIPare down 3.5% at $20.81 this morning on the travel company's second-quarter losses of $0.76 per share, which were considerably wider than Wall Street's estimated losses of $0.18 per share. The company said the disappointing quarterly results reflect the severe impact of the COVID-19 pandemic on the travel industry, but added it remains hopeful for a recovery, as both website users and travel demand have been on a gradual  increase since April.

Digging deeper, TripAdvisor stock is struggling to recover from its mid-March lows near the $13 level. Although shares attempted a rally in early June, supported by the 10-day moving average, the stock has since run into overhead pressure at the 200-day moving average. Longer term, the security has a long way to go before it reaches pre-pandemic levels, and is down 45.2% year-over-year.

Analysts are mostly cynical toward the equity, with 12 of the 16 in coverage carrying a tepid "hold" or worse recommendation, while the remaining four sport a "buy" or better. Meanwhile, the stock's 12-month consensus price target of $20.90 is a 3.1% discount to current levels.

Nonetheless, short interest is down 3.2% in the last two reporting periods, though it looks like these bears are still in control.The 13.14 million shares sold short make up 14.1% of the stock's available float, or 3.2 days at the stocks average pace of trading.

That negative sentiment is not echoed in the options pits, however, where calls are more popular. TRIP sports a 50-day call/put volume ratio of 9.76 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits in the 97th percentile of its annual range. This suggests a healthier-than-usual appetite for bullish bets of late.

Also worth noting is the security's Schaeffer's Volatility Scorecard (SVS), which sits high at 90 out of 100. This means TripAdvisor stock has tended to exceed option traders' volatility expectations during the past year -- a good thing for option buyers.

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