Revenue growth

Trivago’s revenue has risen an impressive 90.0% CAGR (compound annual growth rate) from 2010 to 2013. As Trivago’s markets mature, the growth rate will decline, as is evident from recent trends.

Revenue rose 43.0% in 2015 to $324.6 million compared to $253.0 million in 2014. For the nine months ended in September 2016, revenue rose 38.0% year-over-year to $657.4 million.

Analyzing Trivago’s Financials: Revenue at the Cost of Ads

Revenues for the Americas and the Rest of the World are expected to rise at a faster pace than Developed Europe. That’s because they’re newer markets than Europe. As a result, brand awareness and penetration are already high in Europe, leading to moderate growth in the region.

Cost structure

Selling and marketing expenses, or all its ad spends, are the single largest cost for Trivago, accounting for 85.0% of its total expenses. These expenses were $346.0 million in 2014, $501.0 million in 2015, and $604.7 million for the nine months ended in September 2016.

However, it’s a conscious strategy by Trivago to increase brand awareness. According to management, ads help increase visits to the website. That, in turn, makes it more lucrative for more hotels to list on Trivago. Building up hotel inventory is important to develop stickiness and make the service valuable to customers, which results in more visits.

Other costs are minimal. Administrative expenses form only 7.0% of its total expenses, while technology and content form another 6.0%.

Running in losses

Trivago’s total expenses, however, are 110.0% of its revenues, meaning the company is still not profitable. For 2014, it had an operating loss of $37.0 million. For 2015, losses were $52.0 million. For the nine months ended in September 2016, it had losses of $56.5 million.

Expedia (EXPE) makes up 1.4% of the Guggenheim S&P 500 Pure Growth ETF (RPG). It also invests 0.99% in Expedia’s archrival Priceline (PCLN) and 0.63% in TripAdvisor (TRIP). However, it has no holdings in leading Chinese OTA (online travel agency) player (CTRP).

Latest articles

Today, Canopy Growth announced that it acquired the Saskatchewan-based KeyLeaf Life Sciences along with entities relating to the company and its intellectual property. Here's what you need to know about the completed deal.

Yesterday, Tyson Foods (TSN) and fellow meat producers Pilgrim’s Pride (PPC) and Sanderson Farms (SAFM) took a hit to their stocks after news came out about an investigation over price-fixing allegations.

On June 24, RH (RH) was trading at $115.01, implying a rise of 21.2% since its announcement of its first-quarter earnings results on June 12. Despite the surge in its stock price, the company is still trading at a discount of 29.1% to its 52-week high.

26 Jun

Roku Stock Fell Close to 7.0% Yesterday

WRITTEN BY Aditya Raghunath

Roku stock fell 6.8% yesterday to close trading at $93.25 per share. Roku stock has lost over 9.0% in market value in the last two trading days. Prior to this pullback, Roku stock was up a whopping 235.0% year-to-date.

26 Jun

Beyond Meat Stock Up Today on New Product Launch

WRITTEN BY Rajiv Nanjapla

Today, Beyond Meat (BYND) announced that its new product, Beyond Beef, will hit markets across the US later this week.

FedEx (FDX) ended fiscal 2019 on a dismal note and reported a significant YoY decline in fourth-quarter earnings. The delivery giant posted adjusted EPS of $5.01, which was 15.2% lower than the year-ago quarter’s earnings of $5.91. The company cited sluggish revenue growth and increased expenses as the main reason behind the dismal bottom-line performance.