TripAdvisor's shares have tumbled to their lowest level ever, with the company's market value shrinking from over $15 billion to roughly $998 million. The sell-off has accelerated this week as investors grow increasingly concerned about the threat posed by AI-powered travel agents, such as Meta Platforms' Muse, which can help users find and book accommodations automatically.
Mounting challenges
The travel platform, known for its hotel reviews and booking services, also owns Viator, an experiences marketplace acquired in 2014 for $200 million. Despite its scale, TripAdvisor has struggled with slowing growth and intensifying competition in recent years.
Revenue fell 7% year-over-year to $441 million in the latest quarter, with the hotels segment showing the most pronounced weakness. Profitability has also deteriorated: adjusted EBITDA for the experiences segment dropped 19% to $30.8 million, while the hotels segment's EBITDA declined 23% to $45.6 million. In response, management has cut jobs during the quarter.
The company has taken steps to unlock value, including selling TheFork to American Express for $700 million. It is also focusing on expanding its experiences business and integrating more AI tools into its platform.
Analyst outlook and technicals
Wall Street remains cautious. Analysts project third-quarter revenue of $453 million, down 17.8% from the same period last year, and fourth-quarter revenue of $340 million, a 17% decline. UBS analyst Stephen Ju has a price target of $12, while B. Riley Securities sees $12.50. JPMorgan and Cantor Fitzgerald both hold underweight ratings. Short interest has climbed to 25%, reflecting bearish sentiment.
From a technical perspective, TripAdvisor's stock has broken below the critical support level of $8.96, which marked its March and May lows. The shares are now trading beneath all major moving averages and the ultimate support on the Murrey Math Lines indicator. If the downtrend persists, the next key support could be around $5. A move back above $8.96 would negate the bearish setup.
Investors are closely watching whether the company can adapt to the AI-driven shift in travel planning, but the current trajectory suggests further downside risk remains.
This article is for informational purposes only and does not constitute financial advice.
