TRIP
Tripadvisor, Inc.
$10.08
Platform & Compounding FCF
85%
Two-stage FCF DCF
Mild
·
Conviction
Fair Value
Trading 9.5% below fair value
You pay
$10.08
Bear
$8.60
Fair
$11.14
Bull
$13.47
Bear
$8.60
-14.6%
4% stage 1 growth, 11% discount
Fair
$11.14
+10.5%
7% stage 1 growth, 11% discount
Bull
$13.47
+33.6%
10% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (7% base case)
Terminal Value % of EV
37%
Implied Market Multiple
16.8x
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $11.75 from 56 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $11.14 per share.
Warnings
Stock-based employee pay equals 270% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions