Summary
TripAdvisor business model still hinges on being an OTA. Nevertheless, its real value lies in its unique monthly users.
TRIP has so far faced significant challenges in unlocking its true potential value. This is because as users switch to mobile, it's increasingly difficult to monetize them.
Nevertheless, other platforms (like Facebook) have succeeded in this task. If TripAdvisor was to succeed as well, then its earnings potential would imply a much higher valuation.
I believe that TRIP is currently priced as it will fail at fully monetizing its MAUs. This represents an opportunity for investors.
TripAdvisor (TRIP) is an exciting company. It was initially conceived as a disruptive travel platform. As the global online travel market matured (although it's still in its early stages), many other similar competitors tried to take its place. This resulted in TRIP morphing into a hybrid between a traditional OTA and an online travel forum. Currently, TRIP is without a doubt the best place to find reviews about different travel alternatives.
Nevertheless, its stock valuation isn't as clear-cut. TRIP still faces monetization challenges before unlocking its true value potential. Hence, it's vital for investors to understand the TRIP's potential upside and downside before making an investment decision.
