TRIP
Tripadvisor, Inc.
$14.75
Platform & Compounding FCF
85%
Two-stage FCF DCF
Moderate
·
Conviction
Overvalued
Trading 32.4% above fair value
You pay
$14.75
Bear
$9.02
Fair
$11.14
Bull
$13.02
Bear
$9.02
-38.9%
4% stage 1 growth, 11% discount
Fair
$11.14
-24.4%
6% stage 1 growth, 11% discount
Bull
$13.02
-11.7%
8% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (6% base case)
Terminal Value % of EV
35%
Implied Market Multiple
23.6x
Market is pricing in (growth)
11.2%
vs 5.9% base
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 $14.42 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.
Wall Street's average price target is $14.42 (from 56 analysts). Our estimate is 35% below the consensus -- consider that gap carefully.
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