Trip.com (TCOM) Stock Forecast & Price Target

Trip.com Group is poised for growth, as it is projected to achieve mid-teens percentage revenue increases year-over-year, driven by a boost in both domestic and outbound travel along with the expansion of its international brand. The company has demonstrated strong momentum, with its sales increasing by 55% year-over-year, and key segments like accommodation and transportation showing year-over-year growth rates of 23% and 8%, respectively. Additionally, China's cross-border travel capabilities are forecasted to surpass 90% of pre-pandemic levels by the end of 2025, indicating a sustained recovery and favorable conditions for ongoing growth in the travel industry.

Trip.com Group faces a challenging outlook as domestic hotel pricing continues to decline year-over-year, despite easier comparisons due to increased supply, which negatively impacts revenue generation. Additionally, the company's lower gross margins, with a margin guide of approximately 28% reflecting a year-over-year decrease of 150 basis points, raise concerns over profitability amidst rising operational costs. Furthermore, potential downturns in the global economy could severely constrict consumer travel spending, compounded by slowing outbound revenue trends that are estimated to grow at approximately 12-17%, which is significantly less than previously expected and poses risks to the company's competitive positioning within a crowded online travel agency market.