Tripadvisor Inc shares pushed strongly higher on Wednesday, October 14th after the firm set out its earnings for the three months through September before the market opened. At time of writing shares in the online travel boutique were selling for $82.96, up 24.4 percent from their close on Tuesday. The reason behind the rise seemed clear, but it wasn’t clear if the hope would last.
Among the ordinary numbers sent forward with the earnings report were the details of a new partnership between Tripadvisor and the Priceline Group , one of its rivals. Some of Pricelines major online travel platforms, starting with Booking.com, will begin to use Tripadvisors Instant booking program. That’s likely to boost revenue at Tripadvisor, and Wall Street is jubilant.
Tripadvisor looks to cement growth
The Priceline announcement comes after a long period of doubt about the future of Tripadvisor on Wall Street. The firm’s ability to compete, disrupt and set itself apart from the other major brands in the same segment has been questioned again and again in the last year.
Shares in the firm hit an all time high of more than $100 in 2014, but have struggled to deal with a less than frothy stock market since then. The firm’s progress seems to match that of other high-growth web-based firms over the last year, and those in charge will want to set themselves apart with this big announcement.
Stephen Kaufer, who is both CEO and President at Tripadvisor said “Having The Priceline Group join the instant booking platform is a huge win for travelers and we couldn’t be more thrilled to have them as our first strategic, global online travel agency partner.”
He added that “”Millions of TripAdvisor users coming to the site to plan, compare prices and book their trip will be able to instantly book options from The Priceline Group’s global hotel inventory in addition to the 235,000 properties that are already instantly bookable on TripAdvisor.”
Holding the line at Tripadvisor
Wall Street seems sure that the big deal is a major positive for Tripadvisor, but the outcome for the Priceline Group seems less solid. Shares in the firm had fallen by more than 2 percent at time of writing on Wednesday. That firm was not hit by the wave of selling in web stocks over the last year. Shares are selling for about 25 percent more today than they were twelve months ago.
Wall Street seems sure that Tripadvisor can boom off of the back of the Priceline deal today, but the firm faced some very cloudy forecasts in the last few months. Support has been building for the firm on Wall Street, however, particularly as the price of the stock fell in recent months.
Piper Jaffray’s Michael Olson, in a report published on September 17, said that the firm’s shares were worth $95 as its instant booking feature picked up steam with smaller hotels across the globe.
Deutsche Banks’ Lloyd Walmsley, in a report published on September 16, said that the firm was doing well playing a long term game. He said that shares were worth $93, and that instant bookings was built with “a 3-5 year view, not based on short-term monetization.”
It seems that the traction of the feature is paying off, and much of Wall Street is looking for Tripadvisor to keep growing on the back of it.