12 Most Undervalued Travel Stocks to Buy According to Hedge Funds

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6) Trip.com Group Limited (NASDAQ:TCOM)

Forward P/E Ratio as of 13 September: 12.82x

Number of Hedge Funds: 52

Trip.com Group Limited (NASDAQ:TCOM) offers online travel agency services. It provides mobile applications, hotel reservations, flight ticketing, corporate travel management, and train ticketing services.

Trip.com Group Limited (NASDAQ:TCOM) has been generating revenue from advertisement, and it plans to capture ~3%-5% of the ad market. The number of Chinese passport holders sits at only ~10%-15% of the population. Therefore, the company has secular demand given the low saturation. Moving forward, the company’s market share should further be enhanced by effective execution, improvements in the supply chain, enriched content offerings, and strong service quality.

Trip.com (NASDAQ:TCOM) should continue to benefit from China’s restrictive internet service regulations which pose restrictions to international competitors. It is a well-known brand in China and is focused on improving its international operations. Trip.com Group Limited (NASDAQ:TCOM)’s extensive connections in the travel ecosystem enable it to acquire new travelers by incurring minimal advertising costs. This supports the company’s margins.

In 2Q 2024, Trip.com Group Limited (NASDAQ:TCOM) saw continued growth as a result of strong travel demand, primarily for cross-border travel. Its strong performance exhibits its adaptability in a dynamic market. Its net revenue came in at RMB12.8 billion (US$1.8 billion), which represents a rise of 14% YoY. Sequentially, net revenue grew by 7% as a result of stronger travel demand, particularly during the holiday periods.

Barclays increased their price target on shares of Trip.com Group Limited (NASDAQ:TCOM) from $60.00 to $76.00, giving it an “Overweight” rating on 22nd May. As per Insider Monkey’s data, 52 hedge funds reported owning stakes in Trip.com (NASDAQ:TCOM).

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