Can Trip.com break out of its downward trend?
Chinese travel website operator Trip.com International (Nasdaq: TCOM) has seen its stock trend lower since peaking just above $60 in July 2017. From the peak to the trough, the stock lost nearly 60% of its value. The company is set to report earnings on November 13 and investors will be hoping the company can break out of its downward trend.
Analysts expect the company to report earnings of $0.29 per share for the quarter and that is down 31% from the $0.42 the company earned a year ago. Ctrip reported earnings growth of 14% in the second quarter as sales increased by 15%. Analysts expect earnings for 2019 as a whole to drop 13% while sales are expected to increase by 10.7%.
The company's management efficiency measurements are mixed with the return on equity (6.5%) being below average and the profit margin (20.3%) is slightly above average.
Adding these figures up, the Tickeron SMR rating for Ctrip is 26, indicating strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents.
The Tickeron PE Growth Rating for Ctrip is also strong with a reading of 7 and points to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents. A rating of 1 indicates highest PE growth while a rating of 100 indicates lowest PE growth.
Still other fundamental readings point to below average results for Ctrip. The Valuation Rating is at 66 and indicates that the company is fair valued in the industry. A rating of 1 points to the most undervalued stocks, while a rating of 100 points to the most overvalued stocks. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization.
The Tickeron Profit vs. Risk Rating for Ctrip is 87 and that indicates that the returns do not compensate for the risks. CTRP’s unstable profits reported over time resulted in significant drawdowns within the last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating for the industry is 79, placing this stock worse than average.
Looking at the daily chart for Ctrip we see that the highs from April and July connect to form a downward sloped trend line and the stock is just below that trend line at this time. If we draw a parallel lower rail we see that the lows from August and October connect as well.
The daily overbought/oversold indicators are in overbought territory and at their highest levels since the spring. The stochastic readings did make a bearish crossover on November 4 and that could be a short-term bearish signal.
Tickeron's Trend Prediction Engine generated a bearish signal on Ctrip on November 1. The signal showed a confidence level of 80% and it shows that 81% of past predictions have been accurate. The signal calls for a decline of at least 4% within the next month.
One particular area of analysis that concerns me is the sentiment. The fundamentals are a little mixed with earnings declining, sales increasing, and a split on the ROE and profit margin. In addition, the stock is trending lower. With this in mind, I would expect to see neutral to slightly bearish sentiment, but that isn't the case at all.
There are 38 analysts covering the stock with 27 "buy" ratings, nine "hold" ratings, and two "sell" ratings. This puts the buy percentage at 71% and that is right in the middle of the average range.
The short interest ratio is low at 1.72 and that indicates excessive optimism. When you combine this with the analysts' ratings, you get a slightly optimistic skew to the overall sentiment and I'm not sure Ctrip deserves that much optimism right now.
Aroon Indicator for TRV shows an upward move is likely
TRV's Aroon Indicator triggered a bullish signal on December 03, 2024. Tickeron's A.I.dvisor detected that the AroonUp green line is above 70 while the AroonDown red line is below 30. When the up indicator moves above 70 and the down indicator remains below 30, it is a sign that the stock could be setting up for a bullish move. Traders may want to buy the stock or look to buy calls options. A.I.dvisor looked at 289 similar instances where the Aroon Indicator showed a similar pattern. In of the 289 cases, the stock moved higher in the days that followed. This puts the odds of a move higher at .
Technical Analysis (Indicators)
Bullish Trend Analysis
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where TRV advanced for three days, in of 359 cases, the price rose further within the following month. The odds of a continued upward trend are .
Bearish Trend Analysis
The Stochastic Oscillator may be shifting from an upward trend to a downward trend. In of 66 cases where TRV's Stochastic Oscillator exited the overbought zone, the price fell further within the following month. The odds of a continued downward trend are .
The Momentum Indicator moved below the 0 level on December 03, 2024. You may want to consider selling the stock, shorting the stock, or exploring put options on TRV as a result. In of 90 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .
The Moving Average Convergence Divergence Histogram (MACD) for TRV turned negative on December 03, 2024. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 49 similar instances when the indicator turned negative. In of the 49 cases the stock turned lower in the days that followed. This puts the odds of success at .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where TRV declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
TRV broke above its upper Bollinger Band on November 27, 2024. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 51, placing this stock better than average.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating outstanding price growth. TRV’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is fair valued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (2.098) is normal, around the industry mean (2.121). P/E Ratio (17.839) is within average values for comparable stocks, (31.462). Projected Growth (PEG Ratio) (0.704) is also within normal values, averaging (1.023). Dividend Yield (0.018) settles around the average of (0.031) among similar stocks. P/S Ratio (1.281) is also within normal values, averaging (1.436).
The Tickeron Seasonality Score of (best 1 - 100 worst) indicates that the company is fair valued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
Industry description
Market Cap
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Fundamental Analysis Ratings
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
General Information
a provider of commercial, personal property and casualty insurance products
Industry PropertyCasualtyInsurance