The financial firm B. Riley has upgraded its rating for Trivago (TRVG, Financial) from Neutral to Buy, while also increasing the stock's price target from $4 to $5.50. This optimistic appraisal comes after the company showcased a successful business turnaround, highlighted by results that surpassed expectations, an improved outlook, and positive feedback from management.
Trivago's strategy centers on enhancing its brand marketing efforts to boost user growth and improve downstream conversions, offering a unique value proposition to its advertising partners. This approach is anticipated to drive sustained growth and profitability, as the company expands its advertising expenditures, according to B. Riley's analyst insights.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 5 analysts, the average target price for trivago NV (TRVG, Financial) is $3.81 with a high estimate of $4.48 and a low estimate of $3.38. The average target implies an downside of 8.40% from the current price of $4.16. More detailed estimate data can be found on the trivago NV (TRVG) Forecast page.
Based on the consensus recommendation from 7 brokerage firms, trivago NV's (TRVG, Financial) average brokerage recommendation is currently 3.1, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for trivago NV (TRVG, Financial) in one year is $5.89, suggesting a upside of 41.59% from the current price of $4.16. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the trivago NV (TRVG) Summary page.
TRVG Key Business Developments
Release Date: April 30, 2025
- Total Revenue: EUR124.1 million, a 22% increase year-over-year.
- Net Loss: EUR7.8 million for Q1 2025.
- Adjusted EBITDA Loss: EUR6.5 million, better than internal expectations.
- Operational Expenses: Increased by EUR20.7 million to EUR133.7 million.
- Selling and Marketing Expenses: Increased by EUR21.4 million due to higher brand marketing investments.
- Advertising Spend: Increased by EUR10.4 million (31%) in America, EUR7.3 million (50%) in the rest of the world, and EUR2.7 million (7%) in developed Europe.
- ROAS: Globally stable at 118.1%, with improvements in developed Europe (134%) and reductions in the Americas (102.7%) and the rest of the world (120.3%).
- Cash and Cash Equivalents: EUR118.6 million with no long-term debt.
- Referral Revenue Growth: 44% in the rest of the world, 19% in developed Europe, and 18% in America.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- trivago NV (TRVG, Financial) reported a 22% year-over-year increase in total revenues for Q1 2025, surpassing internal expectations.
- The company raised its full-year revenue growth guidance to mid-teens percentage, indicating confidence in continued growth.
- Significant improvements in conversion rates were achieved through product enhancements and increased product testing velocity.
- AI-powered features, such as hotel filtering and AI-generated hotel highlights, have been expanded, enhancing the user experience.
- The strategic partnership with Holisto is yielding promising results, contributing to increased conversion rates and marketplace health.
Negative Points
- trivago NV (TRVG) reported a net loss of EUR7.8 million and an adjusted EBITDA loss of EUR6.5 million for Q1 2025.
- Operational expenses increased by EUR20.7 million, primarily due to higher brand marketing investments.
- Advertising spend increased significantly across all regions, with a notable 50% increase in the rest of the world.
- Return on Advertising Spend (ROAS) decreased in the Americas and the rest of the world compared to the previous year.
- The impact of the full acquisition of Holisto is not yet reflected in the adjusted guidance, creating some uncertainty about future financial outcomes.
