Core Insights - Trip.com has consistently surpassed earnings estimates, with an average beat of 36.25% over the last two quarters [1][2] - The latest earnings report showed earnings of $1.25 per share against an estimate of $0.91, resulting in a surprise of 37.36% [2] - The previous quarter also saw a significant surprise, with actual earnings of $1 per share compared to an estimate of $0.74, yielding a surprise of 35.14% [2] Earnings Estimates - There has been a favorable change in earnings estimates for Trip.com, indicated by a positive Earnings ESP (Expected Surprise Prediction) [3][6] - The current Earnings ESP for Trip.com is +0.97%, suggesting analysts are optimistic about the company's earnings prospects [6] - The combination of a positive Earnings ESP and a Zacks Rank of 1 (Strong Buy) indicates a high likelihood of another earnings beat [6] Predictive Metrics - Stocks with a positive Earnings ESP and a Zacks Rank of 3 (Hold) or better have a nearly 70% chance of producing a positive surprise [4] - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, reflecting the latest analyst revisions [5] - A negative Earnings ESP does not necessarily indicate an earnings miss but reduces the predictive power of the metric [6]

Core Viewpoint - Trip.com Group Limited (TCOM) has shown significant stock performance, gaining 32.5% over the past six months, outperforming its industry and the S&P 500 Index [1] Group 1: Company Performance - The Zacks Consensus Estimate for TCOM's 2025 earnings per share (EPS) has increased from $3.77 to $3.98, indicating a year-over-year growth of 7.3% [3] - The earnings estimates for the first quarter of 2025 have also risen to 88 cents from 87 cents, reflecting a 6% growth from the previous year [3] - TCOM has consistently surpassed earnings expectations in the last four quarters, with an average surprise of 42.8% [3] Group 2: Market Demand and Growth Initiatives - TCOM is benefiting from robust travel demand, both domestically and internationally, as easing macro conditions have led to increased consumer optimism and travel sentiments [5] - The domestic travel market in China is particularly strong, with a focus on lesser-known destinations contributing to local tourism growth [6] - The company is investing in growth initiatives to enhance its product offerings, including a diversified portfolio of travel and hotel booking packages [7] Group 3: Technological Advancements - TCOM is integrating artificial intelligence (AI) into its services to improve customer experience and meet personalized demands [8] - The international OTA platform has become the most downloaded OTA app in several APAC markets, with air ticket and hotel bookings growing over 60% year-over-year [8] Group 4: Valuation and Financial Metrics - TCOM is currently trading at a discount compared to industry peers based on a forward 12-month price-to-earnings (P/E) ratio, indicating it remains an attractive investment option [10] - The company's trailing 12-month return on equity (ROE) stands at 12%, significantly higher than the industry's 1.2%, showcasing its efficiency in utilizing shareholders' funds [12]

Core Insights - The article discusses the importance of due diligence in financial decision-making, emphasizing that individuals should not rely solely on provided information for investment actions [2]. Group 1 - The content includes general news and publications, personal analysis, and opinions intended for educational and research purposes [2]. - It highlights that the information is not directed personally to any individual and does not consider specific financial situations or needs [2]. - The website may include advertisements and promotional content, with potential compensation from third parties [2]. Group 2 - The article mentions that cryptocurrencies and contracts for difference (CFDs) are complex instruments with a high risk of losing money [2]. - It encourages individuals to perform their own research before making investment decisions and to avoid investing in instruments that are not fully understood [2].

Brokerage Recommendations and ABR - Trip com currently has an average brokerage recommendation ABR of 1 13 on a scale of 1 to 5 Strong Buy to Strong Sell calculated based on the actual recommendations made by 19 brokerage firms An ABR of 1 13 approximates between Strong Buy and Buy [2] - Of the 19 recommendations that derive the current ABR 17 are Strong Buy and one is Buy Strong Buy and Buy respectively account for 89 5 and 5 3 of all recommendations [2] - Brokerage recommendations often have a strong positive bias due to the vested interest of brokerage firms in the stocks they cover For every Strong Sell recommendation brokerage firms assign five Strong Buy recommendations [5] Zacks Rank and Earnings Estimate Revisions - The Zacks Rank is a quantitative model designed to harness the power of earnings estimate revisions and is displayed in whole numbers 1 to 5 unlike the ABR which is displayed in decimals [8] - Earnings estimate revisions are at the core of the Zacks Rank and empirical research shows a strong correlation between trends in earnings estimate revisions and near term stock price movements [10] - The Zacks Rank is always timely in predicting future stock prices as it quickly reflects the revisions made by brokerage analysts to their earnings estimates [11] Trip com s Earnings Prospects - The Zacks Consensus Estimate for Trip com s current year earnings has increased 12 3 over the past month to 3 71 indicating growing optimism among analysts about the company s earnings prospects [12] - The recent change in the consensus estimate along with three other factors related to earnings estimates has resulted in a Zacks Rank 1 Strong Buy for Trip com [13] - The Buy equivalent ABR for Trip com may serve as a useful guide for investors considering the company s strong earnings estimate revisions and Zacks Rank [13]

Core Viewpoint - Trip.com Group Limited (TCOM) has shown exceptional year-to-date performance, significantly outperforming the leisure and recreation services industry and the broader consumer discretionary sector [1][2]. Stock Performance - TCOM stock has increased by 81.2% year-to-date, compared to the industry growth of 22.6% and the S&P 500's 26.7% [1]. - As of the latest close, TCOM stock was priced at $65.25, below its 52-week high of $69.67 and above its 52-week low of $32.42 [2]. - TCOM has outperformed competitors such as Carnival Corporation (CCL), Norwegian Cruise Line Holdings (NCLH), and Live Nation Entertainment (LYV), which saw gains of 40.3%, 41.5%, and 47.1% respectively [2]. Technical Indicators - TCOM stock is trading above its 50-day moving average of $62.66 and its 200-day moving average of $51.23, indicating strong market sentiment [7]. Market Factors - The travel market is showing resilience, with a recovery in consumer confidence and increased demand for diverse travel experiences [8]. - Domestic and cross-border travel in China has seen significant growth, with travel bookings during the National Day holiday exceeding pre-pandemic levels [8]. - Outbound travel is also on the rise, with international flight market activity reaching about 80% of pre-pandemic levels and outbound hotel and air ticket bookings increasing to 120% of 2019 levels [10]. Consumer Trends - There is a notable shift in consumer preferences towards family travel, food, culture, and seasonal experiences, particularly among younger travelers [9]. - Travel bookings from lower-tier cities have surged, with increases of 100% and 300% from Tier 4 and Tier 5 cities respectively during the National Day holiday [12]. Technological Investments - TCOM is investing heavily in technology and AI to enhance user experience and operational efficiency, with AI reducing coding time for engineers by 15-30% [13][14]. - The company aims to improve customer service and content generation accuracy through AI integration [14]. Strategic Initiatives - TCOM is focused on innovation and collaboration with partners to enhance product offerings and customer loyalty [15]. - The company supports domestic hotels in increasing visibility and demand from international markets, with international bookings rising over 60% year-over-year [16]. Earnings Estimates - The Zacks Consensus Estimate for TCOM's 2024 earnings has increased, indicating a growth of 35.4% year-over-year, with 2025 estimates also trending upward [18]. - TCOM has consistently beaten earnings estimates, with an average surprise of 42.8% over the last four quarters [18]. Valuation - TCOM is currently valued at a premium compared to the industry average, with a forward 12-month price-to-sales ratio of 5.05X, higher than the industry's 2.40X [19]. Investment Outlook - TCOM is well-positioned for continued success due to a resilient travel market, strong outbound travel growth, and technological advancements [20]. - The company presents an attractive investment opportunity in the booming travel and tourism sector, currently holding a Zacks Rank 1 (Strong Buy) [21].

Investment Rating - The report assigns a "Buy" rating for the company [2]. Core Views - The domestic market remains strong while the overseas market continues to expand [2]. - The company achieved robust performance in Q3 2024, with revenue and adjusted net profit reaching RMB 406.1 billion and RMB 150.0 billion, respectively, representing year-on-year growth of +18.7% and +44.3% [2]. - The strong growth is attributed to robust travel demand during the domestic summer vacation and Golden Week, as well as continued expansion in overseas markets [2]. Summary by Sections Financial Performance - For Q1-Q3 2024, the company reported revenue and adjusted net profit of RMB 406.1 billion and RMB 150.0 billion, respectively, with year-on-year increases of +18.7% and +44.3% [2]. - The company’s revenue for Q3 2024 was RMB 68.0 billion, reflecting a year-on-year growth of +16.2% [2]. - The company’s gross margin improved to 81.8% in Q3 2024, with a net profit margin of 36.9% [2]. Business Segments - The company’s revenue from accommodation bookings, transportation ticketing, and vacation travel for Q1-Q3 2024 was RMB 164.3 billion, RMB 155.2 billion, and RMB 34.7 billion, respectively, with year-on-year growth rates of +23.1%, +8.3%, and +42.3% [2]. - The international OTA platform continued to expand rapidly, with hotel and flight bookings growing over 60% year-on-year in Q3 2024 [2]. Market Outlook - The report anticipates that domestic travel demand will gradually stabilize, while outbound, inbound, and pure overseas markets are expected to maintain strong growth momentum [2]. - The target price for the company is set at USD 71.25, indicating a potential upside of 16.2% from the current stock price of USD 61.32 [2]. Financial Projections - The company’s projected revenue for 2024 is RMB 44,562 million, with a growth rate of 122.2% compared to 2023 [4]. - The projected Non-GAAP net profit for 2024 is RMB 13,071 million, reflecting a year-on-year increase of 910.1% [4]. Shareholder Information - Major shareholders include Baidu Group (8.89%) and Capital World Investors (5.92%) [2].

Investment Rating - Maintain BUY rating with a target price of US$71 0, representing a 15 8% upside from the current price of US$61 32 [1][2] Core Views - Trip com Group (TCOM) reported strong 3Q24 results with total revenue of RMB15 9bn, up 16% YoY, 2% above Bloomberg consensus estimates [1] - Non-GAAP operating income (OP) was RMB5 5bn, 6% better than consensus, driven by optimized sales and marketing spend [1] - Domestic business volume growth exceeded expectations, and outbound business recovery is on track, reaching 120% of 2019 levels in 3Q24 [1] - Incremental investment in international expansion is expected to support long-term revenue and earnings growth [1] - DCF-based target price raised by 8% to US$71 0, reflecting a more positive earnings outlook and valuation rollover to 2025E [1][10] Financial Performance Revenue and Profitability - 3Q24 revenue: RMB15 9bn, up 16% YoY, with domestic hotel reservations growing by mid-to-high-teens YoY and outbound air and hotel reservations recovering to 120% of 2019 levels [1] - Non-GAAP OPM for 3Q24 was 34 4%, 1 5ppts better than consensus, driven by efficient S&M spend [1] - 4Q24E revenue estimated at RMB12 4bn, up 20% YoY, 2% ahead of consensus [1] - Non-GAAP OPM for 4Q24E/2024E estimated at 20 7%/30 3%, compared to 25 6%/29 6% in 4Q23/2023 [1] Segment Performance - Domestic air tickets volume grew by mid-to-high single digits (MHSD) YoY in 3Q24, with a similar trend in 4Q24 QTD [1] - Outbound air and hotel reservations outperformed the industry by ~40ppts, reaching 120% of 2019 levels in 3Q24 [1] - Trip com achieved robust YoY revenue growth of ~60% in 3Q24, driven by strong growth in air tickets and hotel reservations [1] Forecasts - Revenue for 2024E/2025E/2026E estimated at RMB52 985bn/60 765bn/67 886bn, with YoY growth of 18 9%/14 7%/11 7% [5] - Adjusted net profit for 2024E/2025E/2026E estimated at RMB16 811 7bn/17 807 3bn/20 149 2bn, with YoY growth of 28 6%/5 9%/13 2% [5] Valuation and Growth - DCF-based target price of US$71 0, translating into 21 3x/20 7x 2024E/2025E PE (non-GAAP) [1][10] - Non-GAAP OP expected to grow at a 23-25E CAGR of 19% [1] - Gross margin for 2024E/2025E/2026E estimated at 81 5%/81 4%/81 4%, with operating margin at 26 3%/27 4%/28 5% [5][19] International Expansion - Trip com's international expansion, particularly in Asia, is supported by low online penetration and strong supply chain capabilities [1] - The company is expected to achieve a better OPM profile in international markets compared to domestic business, driven by higher AOV for international hotels and higher take rates for international ticketing [1]

Investment Rating - The report maintains a "Buy" rating for Trip.com Group (TCOM) with a target price of $71.00, reflecting an upside potential of 15.8% from the current price of $61.32 [10][19]. Core Insights - Trip.com Group reported solid business growth, with total revenue for Q3 2024 reaching RMB 15.9 billion, a year-on-year increase of 16%, exceeding Bloomberg consensus estimates by 2% [7][8]. - The company’s non-GAAP operating profit for the same period was RMB 5.5 billion, surpassing expectations by 6%, driven by better-than-expected sales and marketing expenditure optimization [7][8]. - The report highlights the robust recovery in outbound travel and the company's ongoing international expansion efforts, which are expected to contribute to long-term revenue and profit growth [7][9]. Financial Performance Summary - For FY 2024, total revenue is projected to be RMB 52.985 billion, representing an 18.9% year-on-year growth [13]. - Non-GAAP net profit is expected to reach RMB 16.812 billion in FY 2024, reflecting a 28.6% increase compared to the previous year [13]. - The report anticipates a compound annual growth rate (CAGR) of 23-25% for non-GAAP operating profit over the next few years [7][9]. Booking and Revenue Growth - The report indicates that domestic hotel bookings in Q3 2024 grew in the mid to high single digits year-on-year, with a similar trend expected to continue into Q4 2024 [8]. - Outbound flight and hotel bookings have recovered to 120% of 2019 levels, outperforming the industry average by approximately 40 percentage points [8][9]. - The company is expected to achieve a revenue of RMB 12.4 billion in Q4 2024, a 20% increase year-on-year, which is above market expectations [8]. Cost Management and Profitability - Trip.com’s non-GAAP operating profit margin for Q3 2024 was 34.4%, exceeding market expectations by 1.5 percentage points, primarily due to better-than-expected sales and marketing expenses [9]. - The report projects that the non-GAAP operating profit margin will reach 20.7% for Q4 2024 and 30.3% for the full year [9]. Valuation Metrics - The target price of $71.00 corresponds to non-GAAP P/E ratios of 21.3x and 20.7x for FY 2024 and FY 2025, respectively [19]. - The report emphasizes a positive outlook on Trip.com’s global expansion, particularly in the Asian market, where online penetration remains low [9][19].

Group 1 - Michael Wiggins De Oliveira is an inflection investor, focusing on buying undervalued companies at pivotal moments when their profitability is expected to increase significantly over the next year [1] - The investment strategy emphasizes technology and the Great Energy Transition, including uranium, with a concentrated portfolio of approximately 15 to 20 stocks and an average holding period of 18 months [1] - Michael has over 10 years of experience analyzing companies in the tech and energy sectors, and has built a following of over 40,000 on Seeking Alpha [2] Group 2 - Michael leads the investing group Deep Value Returns, which offers insights through a concentrated portfolio of value stocks, timely updates on stock picks, and a weekly webinar for live advice [3] - The Deep Value Returns community is described as active, vibrant, and supportive, providing accessible chat options for both new and experienced investors [3]

Financial Data and Key Metrics - The hotel occupancy rate in China has surpassed last year's levels, improving from lower than 2023 levels in Q3, partly due to easier comps and more travelers choosing off-peak seasons [1] - Outbound flight and hotel bookings maintained strong year-over-year growth momentum, exceeding 120% of the same period in 2019, with mid- to high double-digit growth in flight and hotel bookings [1] - Trip.com's air and hotel reservations grew robustly by 60-70% year-over-year in Q3, with the APEC region accounting for over 70% of total bookings and showing the fastest growth [3] - Hotel-related revenue accounted for more than 40% of Trip.com's total revenue in Q3, with cross-selling from transportation to hotels continuing to rise [3] - The Trip.com brand contributed around 9% of the group's total revenue, up from 77% in the same period last year [3][4] Business Line Performance - The Trip.com brand's mobile app remained the top channel, contributing 65-70% of global orders and over 70% in the APAC region [3][4] - The company continues to invest in the Trip.com brand, particularly in the international market and the APAC region [4] Market Performance - The China travel market followed normal seasonality post-National Day holiday, with strengthened year-over-year momentum [1] - Outbound flight capacity reached around 80% of the 2019 level in Q3 and exceeded 80% in Q4, with expectations for further improvement in the coming year [2] Strategy and Industry Competition - The company anticipates normalized growth for its China-related business, with continued emphasis on inbound and outbound cross-border travel [1] - Asia is a critical market, representing 50% of GDP growth and 50% of travel industry growth, with a focus on providing a one-stop shopping platform and excellent customer service [4] - The company is investing heavily in technology and AI to improve user experience, coding efficiency, customer service, and content generation [5] Management Commentary on Operating Environment and Future Outlook - The company expects a normalized growth pattern for its China-related business and continued strong growth momentum for the Trip.com brand [1] - Management believes that the expansion and diversification of travel suppliers will significantly contribute to the overall growth of the travel industry [2] - A healthy economic environment is expected to benefit all industries, including travel [3] Other Important Information - The company has achieved efficient operational efficiencies across all expense lines, including cost, product development, and sales marketing expenses, with marketing expenses as a percentage of gross bookings being less than 1% [7][8] - The company anticipates an expanded capital return program for 2025, potentially including dividends and buybacks, subject to board approval [7] Q&A Summary Question: Recent performance post-National Day holiday and 2025 outlook [1] - Post-National Day holiday, the China travel market followed normal seasonality with strengthened year-over-year momentum, and the company expects normalized growth for its China-related business with continued emphasis on cross-border travel Question: Hotel price changes, China hotel inventory growth, and 2025 outlook [2] - Hotel prices are still below last year's levels, and the number of hotels in China listed on the platform was 6-7% higher compared to last year, with expectations for long-term growth from the expansion and diversification of travel suppliers Question: Outbound flight capacity changes and recovery timeline [2] - Outbound flight capacity reached around 80% of the 2019 level in Q3 and exceeded 80% in Q4, with expectations for further improvement in the coming year Question: Changes in traveler overspending and impact of stimulus measures [3] - A healthy economic environment is expected to benefit all industries, including travel Question: Operational and financial performance for Q3 [3] - Trip.com's air and hotel reservations grew robustly by 60-70% year-over-year, with the APEC region accounting for over 70% of total bookings and showing the fastest growth Question: Strategy in Asia and market share growth [4] - Asia is a critical market, and the company focuses on providing a one-stop shopping platform, excellent customer service, and leveraging its volume to drive good products to customers Question: AI initiatives and operating highlights [5] - The company invests heavily in AI to improve user experience, coding efficiency, customer service, and content generation, with AI expected to enhance operational efficiency and user engagement Question: Financial impact of AI in the short-term and long-term [6] - The financial impact of AI investments has been minimal so far, but operational improvements from AI are expected to eventually reflect in financial performance Question: Capital usage and operating leverage [7] - The company anticipates an expanded capital return program for 2025, potentially including dividends and buybacks, and aims to enhance marketing efficiencies across all markets Question: Marketing expenses and operational efficiencies [8] - Marketing expenses as a percentage of gross bookings were less than 1%, benefiting from high customer loyalty and strong cross-selling, with expectations for increased marketing expenses in Q4 due to seasonality