Trip.com (TCOM, Financial) has revealed a strategic move to sell a portion of its Class B ordinary shares in MakeMyTrip Limited back to the company for cancellation. This decision is part of Trip.com's strategy to refine its investment portfolio and improve shareholder returns. Despite the sale, Trip.com will retain its position as the largest minority shareholder in MakeMyTrip, continuing its commitment to support MakeMyTrip's growth journey.
To facilitate this transaction, MakeMyTrip has initiated an offering of convertible senior notes under Rule 144A of the U.S. Securities Act of 1933, alongside a public offering of ordinary shares. Additionally, an agreement has been reached for a 180-day lock-up period, with some standard exceptions.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 29 analysts, the average target price for Trip.com Group Ltd (TCOM, Financial) is $76.39 with a high estimate of $96.15 and a low estimate of $60.41. The average target implies an upside of 26.38% from the current price of $60.45. More detailed estimate data can be found on the Trip.com Group Ltd (TCOM) Forecast page.
Based on the consensus recommendation from 31 brokerage firms, Trip.com Group Ltd's (TCOM, Financial) average brokerage recommendation is currently 1.8, indicating "Outperform" 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 Trip.com Group Ltd (TCOM, Financial) in one year is $73.94, suggesting a upside of 22.32% from the current price of $60.45. 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 Trip.com Group Ltd (TCOM) Summary page.
TCOM Key Business Developments
Release Date: May 20, 2025
- Net Revenue: RMB13.8 billion, a 16% increase year-over-year and a 9% increase from the previous quarter.
- Accommodation Reservation Revenue: RMB5.5 billion, a 23% increase year-over-year and a 7% increase quarter-over-quarter.
- Transportation Ticketing Revenue: RMB5.4 billion, an 8% increase year-over-year and a 13% increase quarter-over-quarter.
- Packaged Tour Revenue: RMB947 million, a 7% increase year-over-year and a 9% increase quarter-over-quarter.
- Corporate Travel Revenue: RMB573 million, a 12% increase year-over-year and an 18% decrease quarter-over-quarter.
- Adjusted EBITDA: RMB4.2 billion, compared with RMB4 billion in the same period last year.
- Diluted Earnings per ADS: RMB6.09 or USD0.84 for the first quarter of 2025.
- Non-GAAP Diluted Earnings per ADS: RMB5.96 or USD0.82 for the first quarter.
- Cash and Cash Equivalents: RMB92.9 billion or USD12.8 billion as of March 31, 2025.
- Share Repurchase: Approximately USD84 million of shares repurchased.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Trip.com Group Ltd (TCOM, Financial) reported a 16% year-over-year increase in net revenue for Q1 2025, indicating strong business momentum.
- Inbound travel bookings surged by approximately 100% year-over-year, driven by favorable visa policies and increased global visibility.
- AI-driven tools like TripGenie have enhanced user engagement, with a 50% increase in average user session duration.
- The company has successfully expanded its international presence, with overall travel bookings on its international OTA platform growing by over 60% year-over-year.
- Trip.com Group Ltd (TCOM) has a strong cash position, with cash and cash equivalents totaling RMB92.9 billion or USD12.8 billion as of March 31, 2025.
Negative Points
- Corporate travel revenue decreased by 18% quarter-over-quarter, reflecting normal seasonality but indicating potential volatility in this segment.
- Adjusted product development expenses increased by 14% year-over-year, driven by higher personnel-related costs.
- The company faces challenges from geopolitical tensions and forex volatility, which could impact outbound travel trends.
- Hotel ADR decreased by high single digits in Q1 2025 compared to the previous year, indicating pricing pressure in the hotel segment.
- Despite strong performance, the marketing expenses ratio may fluctuate due to seasonality and varying market conditions, impacting overall cost efficiency.
