TripAdvisor (TRIP) traded 17% higher on Thursday morning, after posting earnings that smashed Wall Street expectations. While we have loved this one for the upside, it’s not clear how much more room there is to run in the intermediate term.
The internet travel company reported earnings per share of $0.72 and total revenue of $462 million, compared to analyst estimates of $0.48 and $ 479 million. The firm’s non-hotel revenue gained 20% year-over-year, while hotel revenue actually decreased by 2%. Continuing to prove its ability to outperform in the non-hotel segment may in-part explain today’s outperformance.
“Product enhancements, platform expansion, and progressive marketing optimizations continue to hit the mark, and contributed to improved financial results,” explained CEO Steve Kaufer.
In analyzing the market cycles for TRIP, we can see that it is clearly in the rising phase early in its current cycle. This means there is still plenty of time for it to rise in this cycle before the declining phase begins. However, TRIP has hit two targets: an “inverted head & shoulders” measurement, as well as the top of a Fibonacci resistance zone. As such, we believe it should stall soon, although a big pullback is doubtful.
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