Trip.com 1.5% 20270701 S4167043 2025Q1 Earnings Preview Downside Ahead on Lower EPS Expectations

Forward-Looking Analysis
Analysts anticipate Trip.com to report first-quarter 2025 earnings of $5.57 per share, a decrease from $6 in the previous year. Revenue is forecasted to reach $13.83 billion. Despite a consistent growth expectation of 8.3% in earnings and 11.3% in revenue annually, recent guidance fell short of the anticipated 17%-20% growth, causing a 12% drop in share value in Hong Kong. Additionally, the EPS growth rate is projected at 7.2% annually, with a return on equity expected to be 11.6% over the next three years. Analysts have adjusted EPS estimates upwards by 15% to 21% over the past year, signaling potential optimism. However, the company faces challenges in maintaining momentum. The upcoming report, set for May 19, 2025, will be closely monitored for insights into how Trip.com navigates these challenges and leverages resilient travel markets to drive growth.

Historical Performance Review
In the fourth quarter of 2024, Trip.com reported revenue of $11.51 billion, with net income reaching $2.19 billion. The company achieved earnings per share (EPS) of $3.28. Furthermore, it recorded a gross profit of $10.10 billion, reflecting its strong financial performance during this period. Despite these robust figures, the company's guidance for 2025 did not meet market expectations, leading to a dip in its stock price in the subsequent trading sessions.

Additional News
Recent developments for Trip.com include a notable surge in bookings during the Labor Day holiday, indicating a strong growth trajectory. The company also announced a $400 million equity buyback plan, showcasing confidence in its financial stability and commitment to shareholder value. However, investor sentiment has been volatile, with a 16% stock price decline following the full-year 2024 earnings report that fell short of expectations. Additionally, Trip.com is navigating its global expansion strategy amid domestic challenges, aiming to capitalize on resilient travel markets and personalized experiences. The upcoming dividend of $0.28 per share marks another significant decision, reflecting the company's ongoing efforts to attract and retain investors.

Summary & Outlook
Trip.com's financial health remains robust, with strong revenue and net income figures. Yet, the company faces growth challenges due to lower-than-expected guidance for 2025. Key catalysts include its global expansion amid domestic challenges and a resilient travel market. Despite these hurdles, the company's equity buyback plan and dividend announcement indicate confidence in its financial position. However, recent stock volatility and lowered EPS expectations cast a bearish outlook. Investors will closely watch the upcoming earnings report for signs of how Trip.com will address these challenges and leverage growth opportunities for the future.