Ctrip.com (CTRP): On Track For Margin Improvement - Piper Jaffray
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Piper Jaffray analyst, Michael Olson, reiterated his Overweight rating on shares of Ctrip.com (NASDAQ: CTRP) and raised the price target to $53.00 (from $50.00).
Ctrip reported in-line net revenue of CNY 4.4B (+75% y/y), consistent with the high end of guidance and expectations. The company's removal of VAT tax from its gross revenue calculation is a headwind to reported gross revenue growth and guidance, but does not change the economics of Ctrip's business.
The analyst stated that "Operating margins came in 200bps ahead of the high end of guidance, which is a positive sign that the company is on track to return to normalized margins. Mgmt guided for Q2'16 net revenue growth of 70%-75% (vs expectations for 72%). We believe Ctrip will sustain multi-year organic growth above 30% and will return to a 20%-30% FY op margin medium-term (2-3 yrs), driving a 55% EPS CAGR".
Shares of Ctrip.com closed at $47.35 yesterday.
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