Here's Why Trip.com (TCOM) Fell More Than Broader Market

Trip.com (TCOM) closed the most recent trading day at $45.96, moving -1.88% from the previous trading session. This move lagged the S&P 500's daily loss of 0.17%. Meanwhile, the Dow gained 0.49%, and the Nasdaq, a tech-heavy index, lost 0.83%.

The stock of travel services company has risen by 14.78% in the past month, leading the Consumer Discretionary sector's gain of 0.05% and the S&P 500's gain of 3.52%.

Analysts and investors alike will be keeping a close eye on the performance of Trip.com in its upcoming earnings disclosure. In that report, analysts expect Trip.com to post earnings of $0.98 per share. This would mark a year-over-year decline of 2.97%. At the same time, our most recent consensus estimate is projecting a revenue of $2.29 billion, reflecting a 10.52% rise from the equivalent quarter last year.

For the full year, the Zacks Consensus Estimates project earnings of $3.71 per share and a revenue of $9.94 billion, demonstrating changes of -43.1% and +13.47%, respectively, from the preceding year.

Investors should also pay attention to any latest changes in analyst estimates for Tripcom. These revisions help to show the ever-changing nature of near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 4.08% decrease. Trip.com is currently sporting a Zacks Rank of #5 (Strong Sell).

In terms of valuation, Trip.com is currently trading at a Forward P/E ratio of 12.64. This denotes a discount relative to the industry average Forward P/E of 17.65.

Also, we should mention that TCOM has a PEG ratio of 3.16. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Leisure and Recreation Services industry had an average PEG ratio of 1.37 as trading concluded yesterday.

The Leisure and Recreation Services industry is part of the Consumer Discretionary sector. At present, this industry carries a Zacks Industry Rank of 104, placing it within the top 43% of over 250 industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

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This article originally published on Zacks Investment Research (zacks.com).

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