Activist Pressure Ignites Tripadvisor's Turnaround Play

In the ever-evolving travel tech landscape, Tripadvisor (TRIP) has long been synonymous with user reviews and trip planning. But as competition from Google Travel and Meta's Instagram Guides intensifies, the company faces a critical inflection point—one now amplified by activist investor Starboard Value's 9% stake. This intervention has injected urgency into Tripadvisor's strategic transformation, positioning it as a potential contrarian play for investors willing to bet on its revival.

The Catalyst: Starboard's Activism

Starboard Value, known for its aggressive push for change at companies like Autodesk and Pfizer, entered Tripadvisor's scene in late 2024 with a $160 million stake. Their public stance—declaring Tripadvisor “undervalued”—has become a catalyst for strategic shifts. Analysts note that Starboard's involvement often correlates with 10–17% stock jumps post-disclosure, as seen in its July 2025 announcement. The firm's demands—ranging from cost cuts to boardroom changes—are forcing Tripadvisor to accelerate decisions it might otherwise delay.

Tripadvisor's Playbook: Growth and Efficiency

Tripadvisor's management has responded with a multi-pronged strategy to address Starboard's concerns:

1. Reinventing the Core: The company's 2025 brand refresh emphasizes user-generated content and trust, while AI-driven personalization aims to boost engagement and ad revenue. Early signs suggest this is working—user sessions rose 8% in Q2 2025.

2. Experiences Over Reviews: The Viator subsidiary, now led by former Booking.com executive Pepijn Rijvers, is a key growth lever. Experiences bookings grew 22% in 2024, and Viator's focus on curated activities (e.g., cooking classes, guided tours) positions it to capitalize on the post-pandemic “experience economy.”

3. Margin Expansion: Tripadvisor targets 16–18% EBITDA margins by 2025, up from 11% in Q1, through cost discipline. Analysts estimate $100 million in annual savings from streamlining non-core assets like TheFork, which could be spun off or sold.

The Numbers: Undervalued, But By How Much?

Tripadvisor's valuation lags peers significantly. Its trailing P/E of 7.9x contrasts sharply with Expedia's 14.1x and Booking Holdings' 18.5x. If Tripadvisor can push margins to 16% and its P/E multiple expands to just 12x—a conservative midpoint between its current level and sector averages—the stock could see a 50%+ upside.

Risks to Consider

• Competitive Erosion: Google Travel's integration into Search and Maps, plus Meta's push into travel ads, threaten Tripadvisor's review dominance.
• Execution Hurdles: Margins depend on Viator's growth and cost cuts—not guarantees in a volatile travel market.
• Activist Overreach: Starboard's demands for divestitures or a sale could distract from long-term initiatives.

The Investment Thesis

Bull Case: Activist pressure forces Tripadvisor to unlock value through margin expansion and asset sales. A P/E multiple rebound to 12x, paired with 16% EBITDA margins, could push the stock to $55–60 (up from $32 in July 2025).

Bear Case: Competitors outpace Viator's growth, and cost cuts fail to offset stagnant core revenue. The stock could remain rangebound or decline to $25–30.

Bottom Line: A High-Reward Opportunity

Tripadvisor's undervaluation and Starboard's influence create a compelling risk/reward profile. Investors should consider accumulating shares ahead of August 2025 earnings, which will test management's progress on margins and Viator's performance. While risks are real, the upside potential—driven by margin expansion and multiple re-rating—makes this a strategic bet for contrarian investors.

As Starboard's clock ticks, Tripadvisor must prove it can transform from a legacy review site into a modern travel tech powerhouse. For those willing to take the risk, the payoff could be substantial.