Why TripAdvisor's Starboard-Driven Turnaround Could Deliver 124% Upside

TripAdvisor (TRIP) has long been a poster child for undervalued tech assets, but its recent partnership with activist investor Starboard Value has reignited investor optimism. With a 9% stake acquired in 2024 and a playbook proven to unlock value at companies like Microsoft and Dell, Starboard has positioned TripAdvisor for a potential 124% upside. This article dissects the catalysts—Viator's growth, TheFork's strategic potential, and governance reforms—to explain why this turnaround could succeed despite Wall Street's skepticism.

Starboard's Activist Playbook: A Proven Formula for Value Creation

Starboard Value has a track record of demanding governance changes and strategic shifts to unlock shareholder value. At TripAdvisor, its approach has already yielded progress:

• Governance Overhaul: Following the 2024 merger with Liberty TripAdvisor Holdings, dual-class shares were eliminated, reducing structural complexity and aligning voting rights with shareholders. This simplification has freed management to focus on operational improvements rather than battling activist pressure.
• Liquidity Boost: The merger provided $1.65 billion in post-tax liquidity, creating a war chest for buybacks, dividends, or asset sales. Starboard's influence has also spurred board refreshment discussions, though no formal changes have been announced yet.

Historically, Starboard's interventions have delivered average returns of +35% within 12 months for target companies. With TripAdvisor's forward P/E of 7.9—well below travel peers like Expedia (EXPE) at 24—Starboard's push for value realization is timely.

Undervalued Assets: Viator and TheFork Hold the Keys

TripAdvisor's two subsidiaries, Viator and TheFork, are critical to its turnaround:

Viator: The Growth Engine

• Revenue Growth: Viator contributed 46% of TripAdvisor's 2024 revenue, with Q1 2025 bookings up 10% YoY to $156 million. Its 13% CAGR (2024–2026) outpaces the broader travel tech sector.
• Margin Improvement: Viator's adjusted EBITDA loss narrowed to 11.3% in Q1 2025 (vs. 19.5% in 2024), signaling operational efficiency. Starboard may push for further cost cuts or a sale, which analysts estimate could fetch $1.7–2.5 billion.

TheFork: A Hidden Gem in Europe

• Market Leadership: Europe's largest dining reservations platform, TheFork saw Q1 2025 revenue rise 12% YoY to $46 million. Its software subscriptions grew over 90%, driving margin improvements.
• Divestiture Potential: Analysts value TheFork at $362–583 million, given its 12% revenue growth and 55,000 bookable restaurants across 11 countries. A sale could free capital for Viator's expansion.

Near-Term Catalysts: Q2 2025 Earnings and Margin Stabilization

The next 90 days will test Starboard's thesis:

• Q2 Earnings (July 31, 2025): Analysts expect $0.41 EPS, a 5% YoY increase, driven by Viator's mid-teens experiences growth and TheFork's software momentum. A beat on margins could push the stock above $20, its 2024 peak.
• Strategic Alternatives: Starboard may propose selling non-core assets or repurchasing shares. With $1.65 billion in cash, TripAdvisor could buy back ~80% of its market cap at current prices.
• AI Integration: TripAdvisor's partnership with Perplexity (trip-planning AI) and OpenAI has boosted conversion rates by 3x. Scaling these tools could reduce marketing costs and drive EBITDA growth.

Risks to the Turnaround

• Execution Challenges: Viator's average booking value fell in Q1 due to third-party sales, risking margin expansion. TheFork's shift to self-managed sales may also disrupt short-term revenue.
• Competitive Pressures: Google's travel search dominance and Airbnb's experiential offerings pose threats. TripAdvisor's UGC library and AI tools must differentiate it.
• Macroeconomic Uncertainty: A recession could dampen discretionary travel spending. TripAdvisor's exposure to Europe (via TheFork) adds regional risk.

Investment Recommendation: Buy with a 124% Upside Target

Rating: Buy
Price Target: $38.50 (124% upside from $17.51)
Rationale:
- Asset Sales: Viator and TheFork could add $2.3 billion in value, nearly doubling TripAdvisor's current $2.07 billion market cap.
- Margin Improvements: Reducing costs in the legacy TripAdvisor business (which fell 8% YoY in Q1) and scaling Viator's margins to 20%+ could boost EBITDA by 30%.
- Starboard's Track Record: Activist campaigns typically yield peak returns within 18–24 months. TripAdvisor's valuation discount and liquidity position suggest it's ripe for a catalyst-driven rally.

Final Thoughts

TripAdvisor's journey under Starboard is a classic value-unlocking story. While risks like execution slippage and macro headwinds exist, the combination of undervalued assets, liquidity, and activist pressure creates a compelling risk-reward profile. Investors who bet on Starboard's playbook succeeding could reap outsized gains—if the company can execute on its strategic pivots.

Disclosure: This analysis assumes no material changes in TripAdvisor's macro environment or governance structure. Risks include competitive dynamics, regulatory shifts, and execution delays.