Tripadvisor (TRIP) stock jumped about 17% on Thursday after activist investor Starboard Value disclosed a 9% stake in the online travel revenue company, confirming an earlier report by the Wall Street Journal. While investors cheered the news in hopes of better times ahead, Wall Street’s current stance remains bearish on the stock.
Don’t Miss TipRanks’ Half-Year Sale
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
- Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week.
Will Activist Investor Push Improve Tripadvisor’s Performance?
Activist investor Starboard stated that it bought Tripadvisor shares, as it believed that at the time of purchasing TRIP stock, it was undervalued and “represented an attractive investment opportunity.” The activist investor intends to engage with the company’s management and board of directors “regarding opportunities for value creation.” Starboard is known for pushing for changes at several companies to enhance shareholder value. Over the past year, the activist investor has been putting pressure on companies like Pfizer (PFE) and Autodesk (ADSK).
Prior to Thursday’s jump, TRIP stock was essentially flat on a year-to-date basis after plunging over 30% in 2024. Last year, the company formed a special committee to evaluate potential options. The company has been under pressure due to macro challenges and intense competition from larger online travel agents (OTAs). While Tripadvisor exceeded the Street’s expectations for Q1 2025, several analysts were unimpressed as strength in the company’s Viator and TheFork brands was offset by persistent weakness in the namesake brand.
For instance, Jefferies analyst John Colantuoni raised the price target for Tripadvisor stock to $11 from $10 to reflect the Q1 earnings beat but maintained a Sell rating. The analyst noted continued margin pressure and a shift in the mix towards third-party channels, which he believes may enable competitors and restrain direct traffic. Colantuoni contended that the rise in TRIP stock following the results was due to the company exceeding low expectations, rather than any improvement in its fundamental trajectory.
Given Starboard’s track record of putting pressure on companies to cut costs and streamline operations, Tripadvisor’s performance might improve in the days ahead. Investors’ reaction to Starboard’s stake reflects expectations of better times ahead. However, currently Wall Street remains skeptical.
BTIG Reacts to Starboard’s Stake in Tripadvisor
Reacting to the news of Starboard’s stake, BTIG discussed some potential outcomes. The firm thinks that Starboard could leverage Tripadvisor’s content to explore AI (artificial intelligence) trip planning, expand on membership efforts while avoiding the prior mistakes related to a subscription product, and explore on-platform bookings to improve monetization. BTIG added that currently, there is no visibility on Tripadvisor’s plans to explore strategic alternatives.
Is TRIP Stock a Buy, Sell, or Hold?
Currently, Wall Street has a Moderate Sell consensus rating on Tripadvisor stock based on one Buy, six Holds, and four Sell recommendations. The average TRIP stock price target of $14.84 indicates a downside risk of 15.2%. Following Thursday’s rally, TRIP stock is up 18.5% year-to-date.
