Shares in Tripadvisor (TRIP) jetted 17% higher today after its new activist investor Starboard Value said the stock was “undervalued.”
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Attractive Investment
Starboard disclosed it had a 9% stake in the online travel guidance platform and that it had chosen it as a destination for its cash based on the belief that it “represented an attractive investment opportunity.”
In a filing with the U.S. Securities and Exchange Commission, Starboard added that it would engage with the company’s management about opportunities to improve the stock price. It is currently valued at $2.12 billion.
Tripadvisor stock is down 15% over the last 12 months but up 15% over the last three months. This is an indicator of how volatile the travel market has been given concerns over the state of the global economy following President Trump’s tariff plans and geopolitical conflicts in the Middle East and Europe.
However, Tripadvisor remains an outlier in the sector. Its share price rise is trailing the gains seen in the Dow Jones U.S. Travel and Leisure Index. This reflects the company’s slow growth versus its peers but also the potential in its share price.
Food Focus
In its first quarter of 2025 financial results, Tripadvisor reported a slight increase in revenue to $398 million, up 1% year-over-year, while experiencing a net loss of $11 million. The company highlighted its strategic focus on leveraging its trusted position in the travel industry to drive growth, especially as the peak travel season approaches.
Although it is unclear what Starboard’s plans are, they could focus on Tripadvisor’s Viator, a review site for bookable experiences, and TheFork, a restaurant reservation service.
They both grew revenues in the double digits last year. Viator is expected by Wall Street analysts to generate more in revenue this year than the namesake brand.
Starboard has been one of the industry’s busiest activist investors, pushing for changes at several companies in the past year, including Band-Aid maker Kenvue (KVUE), drugmaker Pfizer (PFE) and design-software firm Autodesk (ADSK).
Is TRIP a Good Stock to Buy Now?
On TipRanks, TRIP has a Moderate Sell consensus based on 1 Buy, 6 Hold and 4 Sell ratings. Its highest price target is $20. TRIP stock’s consensus price target is $14.84 implying a 15.15% downside.
