trivago (TRVG) AI Stock Analysis

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trivago

(NASDAQ:TRVG)

47Neutral

trivago's overall stock score is primarily impacted by its financial performance, which shows persistent losses and declining revenues. The technical analysis suggests bearish trends, reinforcing the financial challenges. Valuation concerns also arise from the negative P/E ratio. However, the positive earnings call provides some optimism, highlighting growth in revenue and strategic initiatives in AI and marketing. Nevertheless, significant improvement in financial health and market performance is needed to boost the stock's attractiveness.

Positive Factors

Financial Performance

The company delivered solid results with total revenue growth turning and EBITDA beating expectations by a wide margin.

Product Innovation

Management highlighted several product initiatives that could drive continued conversion rate improvements, including AI-powered highlights, AI Smart Search, and Book & Go.

Revenue Growth

Trivago's brand marketing initiatives resulted in double digit revenue growth from branded channel traffic across Developed Europe and Rest of World.

Negative Factors

Ad Format Challenges

Americas revenue grew -14% YoY, down 26 points vs last quarter, due to headwinds from performance traffic channels and ad format changes made by GOOGL resulting in near-term unfavorable market conditions.

Margin Pressure

Brand investments are likely to weigh on margins.

Profitability Concerns

There are questions around the relevance of the metasearch model and lack of visibility on TRVG's path to profitability.

trivago (TRVG) vs. S&P 500 (SPY)

Market Cap

$228.50M

Dividend YieldN/A

Average Volume (3M)122.92K

Price to Earnings (P/E)―

Beta (1Y)0.63

Revenue Growth-4.88%

EPS Growth85.67%

CountryUS

Employees668

SectorCommunication Services

Sector Strength73

IndustryInternet Content & Information

Share Statistics

EPS (TTM)-0.37

Shares Outstanding22,440,207

10 Day Avg. Volume117,723

30 Day Avg. Volume122,918

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)3.77

Price to Cash Flow (P/CF)N/A

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$3.69

Price Target Upside6.03% Upside

Rating ConsensusHold

Number of Analyst Covering5

trivago Business Overview & Revenue Model

Company Descriptiontrivago N.V., commonly known as trivago, is a leading global hotel and accommodation search platform operating in the online travel industry. Founded in 2005 and headquartered in Düsseldorf, Germany, trivago focuses on empowering travelers to find their ideal hotel at the best available rate by aggregating hotel deals from numerous booking sites worldwide. The platform is accessible through its website and mobile applications, offering a user-friendly experience for comparing prices, availability, and user reviews among millions of hotel listings globally.

How the Company Makes Moneytrivago primarily generates revenue through a Cost-Per-Click (CPC) model, where online travel agencies (OTAs), hotel chains, and independent hotels pay trivago for referrals that lead to potential bookings on their sites. The company acts as a metasearch engine, directing users to partner booking sites where actual reservations are made. Additionally, trivago offers a subscription-based product called 'trivago Business Studio,' which allows hoteliers to enhance their listings with marketing tools and analytics to reach more potential customers. Key partnerships with major OTAs like Booking Holdings and Expedia Group significantly contribute to trivago's revenue, as these partnerships ensure a steady stream of listings and competitive pricing available for trivago's user base.

trivago Financial Statement Overview

Summary

trivago's financial health faces challenges with declining revenues and persistent losses. Despite high gross profit margins indicating effective cost management, negative operating margins and net losses reflect inefficiencies. The balance sheet is stable with low leverage but lacks profitability. Positive cash flow generation from operations is present, yet growth in free cash flow is lacking.

Income Statement

Negative

trivago's income statement shows declining revenue and profitability. The gross profit margin remains high at around 97.3% in TTM, indicating effective cost management. However, the net profit margin is negative due to persistent net losses, with a TTM net income of -23.7 million. Revenue growth is negative compared to previous periods, which highlights a concerning trend. EBIT and EBITDA margins are also negative, reflecting operating inefficiencies.

Balance Sheet

Neutral

The balance sheet reveals a stable equity position with an equity ratio of approximately 65.7% in TTM, indicating a solid financial base. The debt-to-equity ratio is low at 0.19, suggesting low financial leverage risk. However, the return on equity is negative due to net losses, which is a significant weakness. Overall, the balance sheet shows stability but lacks profitability.

Cash Flow

Neutral

trivago's cash flow statement highlights a positive operating cash flow of 20.2 million in TTM, indicating sufficient cash generation from operations. However, free cash flow has decreased compared to the previous year, showing a negative growth rate. The operating cash flow to net income ratio is healthy, but free cash flow to net income ratio is constrained by net losses. Overall, cash flow management appears stable, but growth remains a concern.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
460.85M	485.03M	535.00M	361.46M	248.92M
	Gross Profit
449.58M	473.06M	522.31M	349.96M	238.79M
	EBIT
-32.15M	-156.59M	64.45M	23.68M	-45.03M
	EBITDA
-24.48M	-147.30M	-120.26M	10.05M	-252.65M
	Net Income Common Stockholders
-23.70M	-164.48M	-126.82M	10.70M	-244.64M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
133.75M	127.07M	293.58M	256.38M	227.80M
	Total Assets
300.72M	325.07M	691.59M	834.52M	830.90M
	Total Debt
38.43M	40.73M	45.27M	47.54M	93.17M
	Net Debt
-95.31M	-61.11M	-203.32M	-208.84M	-115.19M
	Total Liabilities
103.11M	110.05M	129.86M	140.74M	166.38M
	Stockholders Equity
197.60M	215.02M	561.74M	693.78M	664.52M
Cash Flow		Free Cash Flow
17.45M	24.29M	62.29M	28.75M	2.37M
	Operating Cash Flow
20.25M	27.80M	66.27M	32.54M	7.87M
	Investing Cash Flow
12.22M	16.29M	-54.91M	10.02M	-16.19M
	Financing Cash Flow
-774.00K	-190.44M	-19.62M	1.05M	-180.00K

trivago Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price3.48

Price Trends

50DMA

4.16

Negative

100DMA

3.34

Positive

200DMA

2.61

Positive

Market Momentum

MACD

-0.23

Positive

RSI

43.11

Neutral

STOCH

36.19

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TRVG, the sentiment is Neutral. The current price of 3.48 is below the 20-day moving average (MA) of 3.98, below the 50-day MA of 4.16, and above the 200-day MA of 2.61, indicating a neutral trend. The MACD of -0.23 indicates Positive momentum. The RSI at 43.11 is Neutral, neither overbought nor oversold. The STOCH value of 36.19 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TRVG.

trivago Risk Analysis

trivago disclosed 57 risk factors in its most recent earnings report. trivago reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

trivago Peers Comparison

Overall Rating

UnderperformOutperform

Sector (58)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
YELP	74 Outperform	$2.12B	17.02	17.79%	―	5.61%	37.61%
OPRA	74 Outperform	$1.22B	15.16	8.64%	5.44%	20.42%	-36.54%
EVER	72 Outperform	$814.86M	26.20	29.75%	―	73.72%	―
Sector *	58 Neutral	$12.88B	6.77	-2.53%	3.86%	2.36%	-36.74%
SEAT	54 Neutral	$507.68M	35.37	5.15%	―	8.80%	-91.33%
TRVG	47 Neutral	$228.50M	―	-11.75%	―	-4.88%	85.67%
KIND	46 Neutral	$579.45M	―	-19.38%	―	13.27%	34.93%

* Communication Services Sector Average

Performance Comparison

TRVG

trivago

3.48

0.89

34.36%

YELP

Yelp

32.56

-7.59

-18.90%

EVER

EverQuote

22.59

4.09

22.11%

OPRA

Opera

14.32

0.64

4.68%

SEAT

Vivid Seats

2.50

-3.33

-57.12%

KIND

Nextdoor Holdings

1.41

-0.74

-34.42%

trivago Earnings Call Summary

Earnings Call Date: Feb 4, 2025 | % Change Since: 13.73% | Next Earnings Date: Apr 29, 2025

Earnings Call Sentiment Positive

The earnings call presented a positive outlook with successful revenue growth, strong financial health, and promising brand marketing and AI initiatives. However, challenges in performance marketing channels and a revenue decline in Developed Europe were noted.

Highlights

Revenue Growth and Improved Financial Performance

Achieved revenue growth in Q4 2024 with a 5% increase in referral revenue and €11.1 million in adjusted EBITDA, surpassing expectations. Total revenues grew by 3% to €94.8 million.

Successful Brand Marketing and AI Initiatives

Promising results from new AI-powered marketing campaigns with Jürgen Klopp and expansion into 23 key travel markets. Developed AI Smart Search and AI highlights for over 300,000 hotels.

Strong Start to 2025

Reported strong double-digit top line growth in January 2025 across all segments, indicating positive momentum moving forward.

Robust Financial Health

Ended Q4 2024 with over €130 million in cash and no long-term debt, demonstrating strong financial stability.

Lowlights

Challenges in Performance Marketing Channels

Faced challenges in performance marketing channels due to changes in Google advertising formats, leading to volatility and traffic volume losses.

Decline in Developed Europe Revenue

Experienced a 2% decline in revenue in Developed Europe, although it was an improvement from the previous quarter.

Company Guidance

During the trivago Q4 2024 earnings call, the company reported a 5% growth in referral revenue and achieved €11.1 million in adjusted EBITDA, surpassing expectations. The quarter's revenue totaled €94.8 million, marking a 3% increase from the previous year. The company highlighted strong double-digit top-line growth across all segments at the beginning of the current quarter. Trivago aims for at least high single-digit revenue growth in 2025, focusing on AI-powered marketing campaigns and expanding brand marketing in over 23 key travel markets. The company maintains robust financial health with over €130 million in cash and no long-term debt. Operational expenses were managed well, decreasing slightly to €87 million, while advertising spend was strategically reallocated, leading to improved return on ad spend (ROAS). Trivago continues to invest in technology enhancements, including AI-driven search features and a differentiated member proposition to boost user engagement and conversion rates.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.