Author Topic: TRIP - Tripadvisor Inc.  (Read 96191 times)

Foreign Tuffett

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Re: TRIP - Tripadvisor Inc.
« Reply #330 on: June 12, 2018, 01:22:16 PM »
Over the past 5 years, TRIP has generated $10 per diluted share in FCF (CFO less capex, which I appreciate is not FCFF nor truly FCFE) (adjusting for dilution since I'm including SBC within FCF). Adjusting for SBC, it's $7.58/diluted share.

Over the past 3 years, it's been $2.40/share including SBC etc. They generate cahs just fine, and that's inclusive of an increasing spend on TV advertising that over time they should need less of as network effects start to make more of the platforms monetization take place on the app.

That cash has gone to, as others have pointed out, share buybacks, debt repayment, and then acquisitions.

The "contrarian analyst" doesn't seem to do much analyzing.

Doesn't seem like a particularly heroic amount of cash generation relative to the current share price?


peterHK

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Re: TRIP - Tripadvisor Inc.
« Reply #331 on: June 13, 2018, 06:46:44 AM »
Over the past 5 years, TRIP has generated $10 per diluted share in FCF (CFO less capex, which I appreciate is not FCFF nor truly FCFE) (adjusting for dilution since I'm including SBC within FCF). Adjusting for SBC, it's $7.58/diluted share.

Over the past 3 years, it's been $2.40/share including SBC etc. They generate cahs just fine, and that's inclusive of an increasing spend on TV advertising that over time they should need less of as network effects start to make more of the platforms monetization take place on the app.

That cash has gone to, as others have pointed out, share buybacks, debt repayment, and then acquisitions.

The "contrarian analyst" doesn't seem to do much analyzing.

Doesn't seem like a particularly heroic amount of cash generation relative to the current share price?

Historics are irrelevant, what matters is the future cash generation potential which is driven by a few things:

1) More efficient ad spend as more traffic moves onto the app vs. from Google.
2) Better monetization on mobile (used to be 20% of desktop, and now is 40%, and should reach 50%) and more  mobile users vs. desktop. At some point (soon) there will be an inflection where mobile users are growing fast enough to offset desktop declines.
3) Growth in the attractions business which scales rapidly as all platform businesses do.

The result is exponentially expanding margins and FCF generation, not linear, due to the fact this is a platform business and that's how they tend to behave when they start to work well. TRIP's cash flow per share dropped very rapidly on the way down, and I expect it will expand very rapidly on the way up.