Trip-com Group Limited (NASDAQ: TCOM) has confirmed that it will release earnings on Tuesday, December 7, 2021, after market close.
What to look for
The Chinese travel market has been promising despite the resurgence of COVID-19 cases, which is great potential for the company coupled with recovering international markets. The company has been focusing on service quality, supply chain, content capabilities, and laying a robust foundation for growth drivers past the pandemic. The company's initiatives over the past quarter will increase the total value, which will help the company improve going forward. Those efforts will be reflected in the company’s Q3 results.
Earnings: Stockearning’s Estimated EPS for Q3 is expected to be better than the EPS of $0.09 company reported on Q2 2021, which was a 325% earnings surprise. In the third quarter of 2020, the company reported EPS of $0.21. Historical EPS performance shows that the company has topped estimates in all (100%) of the past 12 quarters.
Revenue: In Q2 2021, the company had net revenue of $912 million, representing an increase of 86% YoY. The increase is attributable to the recovery of the domestic market in China and the easing of travel restrictions.
Stock movement: Since the last earnings release, the stock has lost 1%. Trip.com shares have been DOWN 6 times out of the past 11 quarters after the earnings release. So, the historical price reaction suggests a 54% probability of the share price going DOWN once Trip.com releases its earnings. According to the Stockearning algorithm, the predicted first-day move is 5%, while the predicted move on the seventh day is 7%.
What analysts are saying
HSBC analyst Peishan Wang reduced his price target on the stock from $40 to $36 but maintained a “buy” rating on the stock. Wang told investors in a note that Trip.com’s third-quarter is affected by the pandemic and tightening travel restrictions which are likely to go on into Q4. In addition, according to the analyst, visibility in outbound travel has shown signs of weakness again.
CLSA analyst Elinor Leung also lowered the company's price target on the stock from $50 to $46 but maintained a "Buy" rating on the stock. The analyst told investors that Q2 earnings topped expectations, but the second-half outlook is weak considering there have been multiple CVID-19 outbreaks in China.
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