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In the latest market close, Trip.com (TCOM) reached $61.22, with a +1.21% movement compared to the previous day. The stock outperformed the S&P 500, which registered a daily loss of 0.77%. At the same time, the Dow lost 0.95%, and the tech-heavy Nasdaq lost 0.87%.
The travel services company's shares have seen an increase of 12.96% over the last month, not keeping up with the Consumer Discretionary sector's gain of 14.18% and outstripping the S&P 500's gain of 11.54%.
The investment community will be paying close attention to the earnings performance of Trip.com in its upcoming release. The company's upcoming EPS is projected at $0.86, signifying a 3.61% increase compared to the same quarter of the previous year. Meanwhile, the latest consensus estimate predicts the revenue to be $1.91 billion, indicating a 15.93% increase compared to the same quarter of the previous year.
In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $3.44 per share and a revenue of $8.45 billion, indicating changes of -4.18% and +14.02%, respectively, from the former year.
Investors should also note any recent changes to analyst estimates for Trip.com. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. Currently, Trip.com is carrying a Zacks Rank of #3 (Hold).
Valuation is also important, so investors should note that Trip.com has a Forward P/E ratio of 17.57 right now. For comparison, its industry has an average Forward P/E of 18.53, which means Trip.com is trading at a discount to the group.
It's also important to note that TCOM currently trades at a PEG ratio of 1.08. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. Leisure and Recreation Services stocks are, on average, holding a PEG ratio of 1.42 based on yesterday's closing prices.
The Leisure and Recreation Services industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 182, which puts it in the bottom 27% of all 250+ industries.