Why TripAdvisor Stock Has Lost 12.5% YTD

TripAdvisor stock fell

TripAdvisor (TRIP) has fallen 12.5% YTD. As of its June 19 closing price of $47.19, the stock is currently trading near its 52-week low of $42.01 that it reached on June 3. TripAdvisor stock is down 31.6% from the 52-week high of $69.00 attained on November 8 last year. The stock has also underperformed the gains of the Dow Jones, the S&P 500, and the NASDAQ, which are up 13.6%, 16.7%, and 20.4%, respectively.

Why TripAdvisor Stock Has Lost 12.5% YTD

TripAdvisor stock mainly fell after the company reported dismal first-quarter top-line results on May 8, as it posted a decline in monthly average unique visitors. Since its first-quarter results on June 19, the stock has plunged 14.1%. As of May 7, TripAdvisor stock had gained 1.9%.

The online travel booking agency’s first-quarter revenues of $376 million fell short of analysts’ expectations of $386.8 million and declined 1% YoY, mainly due to weakness in its core hotel business.

Additionally, TripAdvisor’s falling unique visitor count also made investors cautious about its growth prospects. The company’s average monthly unique visitors decreased 5% YoY to 411 million users in the first quarter, which was in contrast with last year’s performance when TripAdvisor had reported 11% YoY unique visitor growth.

Peers’ top-line performance

The majority of online travel booking agencies have also reported a decline or slower growth in their first-quarter revenues. The company’s rival Expedia (EXPE) registered a 4.3% YoY increase in first-quarter revenues, which was much lower than the double-digit growth it had recorded in the preceding four quarters.

Booking Holdings’ (BKNG) first-quarter revenues declined 3% YoY, which was in contrast with the strong double-digit top-line growth it had registered in the preceding four quarters. Another competitor, Travelzoo (TZOO), reported a 0.2% YoY decline in first-quarter revenues, which contrasts with the mid-single digit growth in the preceding four quarters.

The Invesco Dynamic Leisure and Entertainment ETF (PEJ) has allocated 2.8% of its portfolio to TRIP stock. The ETF has gained 9.4% in the year so far but has underperformed the Dow Jones and S&P 500’s return of 13.6% and 16.7%, respectively.