TripAdvisor Earnings: Experiences Strength Not Enough to Fend Off Intense Metasearch Competition

We weren't surprised to see the 9% drop in TripAdvisor shares, as continued stout performance in its experiences vertical was overshadowed by ongoing weakness in its core metasearch business, which faces lasting intense competition (the source of our no-moat rating). We plan to lower our $24.50 fair value estimate by around $1 per share because of lower margins in its core business. While shares remain undervalued, we struggle to identify a catalyst to turn around the core segment. Perhaps renewed discussion on crystallizing its thriving experiences business can reinvigorate shares, which could occur if economic visibility improves.