Is TripAdvisor (TRIP) Stock Undervalued Right Now?

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One company value investors might notice is TripAdvisor (TRIP). TRIP is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 11.2 right now. For comparison, its industry sports an average P/E of 23.27. Over the past 52 weeks, TRIP's Forward P/E has been as high as 13.51 and as low as 7.08, with a median of 10.62.

We also note that TRIP holds a PEG ratio of 1.02. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. TRIP's industry currently sports an average PEG of 1.46. Over the last 12 months, TRIP's PEG has been as high as 3.38 and as low as 0.57, with a median of 2.04.

Another valuation metric that we should highlight is TRIP's P/B ratio of 3.49. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 4.07. Over the past 12 months, TRIP's P/B has been as high as 3.54 and as low as 1.91, with a median of 2.60.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. TRIP has a P/S ratio of 0.9. This compares to its industry's average P/S of 0.92.

These are just a handful of the figures considered in TripAdvisor's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that TRIP is an impressive value stock right now.

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This article originally published on Zacks Investment Research (zacks.com).

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