Tripadvisor stock (NASDAQ: TRIP) is set to announce its fiscal first-quarter earnings on Wednesday, May 7, 2025, with analysts estimating an earnings figure of 5 cents per share on $388 million in revenue. This projection signifies a 58% decrease in adjusted earnings year-over-year and a 2% drop in sales when compared to last year’s figures of 12 cents per share and revenue of $395 million. Traditionally, the TRIP stock has displayed a pattern of underperforming after earnings reports, having declined 70% of the times, with a median drop over one day of 7.7% and a maximum observed fall of 29%.
The company’s strategic focus on the Experiences category has produced favorable outcomes, as both the Viator and TheFork segments continue to excel. Conversely, the Brand Tripadvisor segment is experiencing a downward trajectory, reflecting challenges in its conventional business model. Looking forward, the company expects to sustain momentum in the Viator segment, projecting mid to high-teens growth in booking volumes. TheFork is also anticipated to achieve low double-digit revenue growth. However, it is expected that Brand Tripadvisor will experience a slight revenue decline in the low single digits. Currently, the company has a market capitalization of $1.9 billion. Over the last twelve months, it achieved $1.8 billion in revenue while maintaining operational profitability, reporting $92 million in operating income and a GAAP net income of $5 million.
For event-driven investors, historical trends may provide an advantage, whether by positioning themselves in advance of earnings or responding to post-release price movements. If you’re looking for potential gains with less volatility than individual stocks, the Trefis High Quality portfolio offers an alternative, having outperformed the S&P 500 and delivered returns greater than 91% since its inception. See earnings reaction history of all stocks.
Tripadvisor’s Historical Probability of Positive Post-Earnings Return
Here are some insights into one-day (1D) post-earnings returns:
- There are 20 recorded earnings data points from the last five years, yielding 6 positive and 14 negative one-day (1D) returns. Overall, positive 1D returns occurred approximately 30% of the time.
- This percentage increases to 36% when we analyze data from the last three years instead of five.
- The median of the 6 positive returns is 7.2%, while the median of the 14 negative returns is -7.7%.
Additional information regarding observed 5-Day (5D) and 21-Day (21D) returns post-earnings is summarized alongside the statistics in the table below.
Correlation Between 1D, 5D, and 21D Historical Returns
A relatively safer approach (though ineffective if the correlation is weak) is to examine the correlation between short-term and medium-term returns after earnings, identify the pair with the highest correlation, and execute the appropriate trade. For instance, if 1D and 5D show the strongest correlation, a trader can go “long” for the subsequent 5 days if the 1D post-earnings return is positive. Below is some correlation data based on both 5-year and 3-year (more recent) histories. Note that the correlation 1D_5D refers to the correlation between 1D post-earnings returns and the subsequent 5D returns.
Is There Any Connection With Peer Earnings?
Occasionally, the performance of peers can impact post-earnings stock reactions. In fact, pricing may begin even before the earnings are announced. Below is some historical information regarding the post-earnings performance of Tripadvisor stock in comparison with the performance of peers who reported earnings shortly before Tripadvisor. For a fair comparison, peer stock returns also represent post-earnings one-day (1D) returns.
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