Ctrip.com (CTRP): Becoming A Margin Story - Oppenheimer

September 1, 2016 9:16 AM EDT
Get Alerts CTRP Hot Sheet
Price: $42.85 +1.11%

Rating Summary:
    18 Buy, 5 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 21 | Down: 31 | New: 25
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Oppenheimer analyst, Jed Kelly, reiterated his Outperform rating on shares of Ctrip.com (NASDAQ: CTRP) as the company transitions to a margin story.

CTRP reported a solid 2Q16, with in-line revenue and non-GAAP operating margins 240 bps above the Street forecast. Organic hotel revenue decelerated to mid-20%, which the analyst attributed to a combination of new VAT taxes and maturing high-end accommodations. However, consolidated operating margins expanded 1,600bps y/y, reflecting CTRP's stronger competitive position.

The analyst stated "We will monitor hotel revenue, and are modeling a higher mix from lower-end markets, which carry better commissions, but higher couponing. Guidance for 3Q implies consistent revenue growth, and margins expanding ~1,000bps sequentially, which could leave less wiggle room for a typical margin beat. However, despite slowing organic revenue growth, we project non-GAAP operating-margins to expand ~1,500bps in two years, which should cause the stock to react positively".

No change to the price target of $55

For an analyst ratings summary and ratings history on Ctrip.com click here. For more ratings news on Ctrip.com click here.

Shares of Ctrip.com closed at $47.35 yesterday.



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