Starboard's TripAdvisor Stake: Activist Play or Travel Tech Trap?

Activist investors often thrive in the gap between a company's potential and its market valuation. Starboard Value's 9% stake in TripAdvisor (TRIP) highlights this tension, as the travel tech firm trades at $15.73—just below its $16.63 median analyst price target—amid a mix of strategic underperformance and promising growth avenues. This article examines whether Starboard's activism can bridge the gap or if structural challenges in the travel sector will keep TRIP anchored.

Starboard's Activist Play: Lessons from Pfizer and Kenvue

Starboard's track record in pushing strategic changes offers both hope and caution. At Pfizer, the firm criticized overpriced acquisitions and poor R&D returns, demanding accountability for a CEO who had overseen a $20 billion market value decline since 2019. Despite Starboard's pressure, Pfizer's board resisted major changes, highlighting the limits of activism when entrenched leadership and complex pipelines exist. Similarly, at Kenvue (the consumer health spinoff from Johnson & Johnson), Starboard secured a board seat but faces competition from rival activist TOMS Capital, underscoring the difficulty of orchestrating rapid turnarounds in fragmented industries.

The key takeaway: Starboard's influence hinges on management's willingness to adapt and the underlying business's structural health. For TripAdvisor, the question is whether its undervaluation stems from solvable inefficiencies or intractable industry headwinds.

TripAdvisor's Divergent Performance: Core Struggles vs. Experiential Growth

TripAdvisor's valuation gap reflects a dual narrative. Its core Brand TripAdvisor segment—reliant on hotel bookings and ad revenue—has stagnated, hampered by competition from Booking Holdings and Expedia, as well as margin pressures from reliance on commoditized ad sales. Analysts note that TRIP's under-monetization of its legacy platform remains a drag, with revenue growth lagging peers.

However, Viator (experiential travel) and TheFork (dining reservations) offer bright spots. These segments, which now account for ~25% of revenue, are growing at high-single-digit rates, outpacing the core business. Starboard may push to double down on these divisions, divesting non-core assets, or accelerating AI-driven personalization to boost margins.

TripAdvisor's stock price performance vs. Booking Holdings (BKNG) and Expedia (EXPE) over the past 12 months

Valuation Gap and Governance Risks

The $0.90 difference between TRIP's current price and its median PT ($16.63) reflects investor skepticism about execution. While some analysts see upside in Viator's potential (Goldman Sachs' $24 PT), others fear structural challenges:

1. Competition: Booking and Expedia dominate the hotel-booking market, squeezing TripAdvisor's ad revenue.
2. Margin Pressures: The core business's reliance on thin-margin ads contrasts with Viator's higher-margin experiences, but scaling the latter is capital-intensive.
3. Governance Battles: Starboard's demands could clash with management's strategy. For instance, selling the legacy TripAdvisor business might unlock value but risks alienating users reliant on its review platform.

Data-Driven Thesis: Hold with Caution

Buy: If Starboard can drive decisive action—such as spinning off the core business, prioritizing Viator's growth, or slashing costs—TRIP's stock could approach Goldman's $24 PT.

Hold: The median PT of $16.63 suggests limited upside, but the 17.5% potential gain from current levels makes TRIP a defensive play in a volatile travel sector.

Sell: Structural risks dominate. The $11 PT from Cantor Fitzgerald and Jefferies reflects concerns that TRIP's legacy model cannot compete with rivals, and Viator's growth may not offset core declines.

TripAdvisor's price-to-earnings (P/E) ratio vs. industry peers (Booking Holdings, Expedia) over the past 5 years

Conclusion: A Tightrope Between Turnaround and Turbulence

Starboard's activism offers TripAdvisor a chance to rethink its strategy, but the path to unlocking value is fraught with execution risks. The Hold recommendation balances the 10% upside to the median PT against the 32% downside risk highlighted by pessimistic analysts. Investors should monitor two catalysts:
1. Viator's performance: A revenue beat in Q3 2025 could narrow the valuation gap.
2. Governance developments: If Starboard secures board seats or forces asset sales, the stock could swing sharply.

Until then, TRIP remains a speculative bet on activist-driven transformation in a sector where old models are fading—and new ones are still unproven.

Final Call: Hold
Risk Rating: Moderate. Upside potential exists, but structural challenges and activist uncertainty demand caution.