Tripadvisor Inc (TRIP) Misses On Revenue, Shares Dive

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Tripadvisor Inc (NASDAQ:TRIP) released its earnings report for the three months through March 31 on Tuesday afternoon after the bell rang on Wall Street. The company showed earnings of $0.54 per share for the three months. Revenue in the period, which Tripadvisor records as its first of fiscal 2014, came in at $281 million. On today’s market shares in the company were battered by overall market contraction. The company’s stock finished trading at $81.37 on Tuesday.

In the run up to the release of these numbers analysts tasked with projecting Tripadvisor Inc (NASDAQ:TRIP) earnings were looking for the company to show EPS of 55 cents per share in this afternoon’s report. Revenue was, according to the 23 analysts surveyed by Businessweek, expected to come in at $283 million by consensus. In the same three months of 2013 the company earned 50 cents per share on revenue of $230 million.

Tripadvisor continues to grow

This afternoon’s earnings show that Tripadvisor Inc (NASDAQ:TRIP) is continuing to balloon as it attempts to become the most important destination for travel information on the web. The company’s revenues are expected to hit above $1 billion for the first time in 2014, and this afternoon’s report got the company well on its way toward that goal.

Tripadvisor Inc (NASDAQ:TRIP) makes the majority of its money from advertising. Click-based advertising accounted for around 70% of the company’s total revenue in the full year 2013, and it was one of the major drivers of growth at the company. Improvements in the way the company advertisers are expected to roll in in the medium term and help to buffer growth in the segment.

Revenue growth is still strong for Tripadvisor Inc (NASDAQ:TRIP), and it’s likely that the company will keep that trend going. The firm’s stock, however, may become divorced from that growth as market trends take over.

Tripadvisor hit by momentum crush

The actual earnings numbers from Tripadvisor Inc (NASDAQ:TRIP) may have little enough to do with the way the company’s shares move in the coming months. The pressure on momentum stocks in the early months of 2014 hit the company hard, and that may continue through the rest of the year.

David Einhorn reckons there’s another tech bubble. If he’s right every company operating on the web is likely to be hit hard by the burst. A company like Tripadvisor Inc (NASDAQ:TRIP) , which trades at 57 times earnings, is likely to be hit harder than the majority, despite what it says in the earnings reports.

John Malone’s Liberty Interactive announced on Tuesday morning that it was seeking to get rid of the stake it had accumulated in Tripadvisor Inc (NASDAQ:TRIP) . That appears to have precipitated some of the sell off in the company’s shares on Tuesday, but a generally depressed market for momentum companies is likely partially responsible. Liberty owns 22% of Tripadvisor.

The rest of 2014 may see Tripadvisor Inc (NASDAQ:TRIP) shareholders become distanced from the company’s earnings as the company’s stocks become more influenced by market trends than company numbers. With a 46% increase in value accrued in the last twelve months, some shareholders will certainly be thinking about letting go of their stake in the company.

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