Northern, WI 2/9/12 (StreetBeat) – Like night follows day, ugly quarters are predictably followed by bearish commentary from the Street.TripAdvisor (Nasdaq: TRIP) nicely illustrates that concept this morning. Last light, in its first report as an independent public company following a spin off from Expedia, the company posted Q4 results that sorely disappointed the Street. TRIP posted revenue of $137.8 million, up 30% from a year ago and ahead of the Street at $133.7 million. But net income was up only 19% from a year ago, resulting in GAAP profits of 16 cents a share, well short of the Street at 24 cents.
Perhaps more importantly, the Street found the company’s guidance to be severely disappointing in terms of both growth and expenses.
The analysts are not happy.
Benchmark Co. analyst James Dobson cut his rating on the stock to Hold from Buy.
“TripAdvisor reported decent Q4 results but issued disappointing guidance,” Dobson writes in a research note. “2012 revenue guidance was lower than anticipated with no EBITDA growth. TripAdvisor will aggressively spend on search engine marketing. The level of increased expenses is surprising.”
Dobson noted that revenue guidance for 2012 is for mid-to-high percentage growth, lower than 2011, and below expectations. The company blamed the weak view on slower hotel travel growth, a redesigned website with less monetization and various other factors. And he he says that expense guidance was higher than expectations, due largely to planned higher spending on search engine marketing.
Lazard Capital analyst Jake Fuller likewise cut his rating to Neutral from Buy. He cites three issues for the stock:
Top-line guidance points to a material slowdown.
Margin was weak in Q4 and guidance points to further pressure in 2012.
“The stock is near our initial target and estimates are down. In short, we underestimated the headwinds here.”
TRIP is down $5.83, or 17%, to $28.51.
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