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TripAdvisor Is Well-Positioned for Long-Term Growth

Dan Wasiolek

Dan Wasiolek: TripAdvisor may be best known for reviews, but its strong network of travel content, recent addition of direct booking capability, and attractive discount to our fair value estimate make it a stock that investors should have on their radar.

TripAdvisor shares and revenue have seen recent pressure, as it launches its direct booking feature, Instant Book, globally. This is because there's a learning curve of educating customers on direct-booking availability, as well as building knowledge on improving Instant Book conversion. Ultimately, we see this headwind as transitory because Instant Book enhances the user experience.

Outside of Instant Book, TripAdvisor has a strong network advantage. To illustrate, December visitation to TripAdvisor totaled 116 million versus 26 million for narrow-moat Marriott. Also, TripAdvisor hosts a leading supply of travel content with over 800,000 vacation rentals, 1 million hotels, 4 million restaurants, and 700,000 attractions.

We see narrow-moat TripAdvisor as well-positioned for long-term growth, and forecast annual sales to average low-double digit growth the next 10 years.