Tripadvisor Stock Jumps 4% After Closing $700 Million Sale of TheFork to American Express Ahead of Earnings

Shares of Tripadvisor rose about 4% in early trading Monday after the travel review company completed the sale of its European restaurant reservation business to American Express, days before it reports quarterly results.

Tripadvisor stock gained 37 cents, or 4.01%, to $9.59 as of 9:49 a.m. Eastern time. The shares closed at $9.22 on Friday.

The gain came as travel stocks broadly rallied, with online travel companies and hotel operators moving higher as oil prices fell on hopes for talks between the United States and Iran.

TheFork sale completed

Tripadvisor said it completed the sale of TheFork, its online restaurant reservation and management platform in Europe, to American Express on Nov. 1, according to a regulatory filing.

The companies agreed to the deal on Aug. 2. The sale is valued at about $700 million.

As part of the transaction, Tripadvisor agreed to provide certain services to American Express for 12 months to help with the transition.

Tripadvisor said it expects to discuss the transaction on its third-quarter earnings call on Thursday.

The sale gives Tripadvisor more financial flexibility as it narrows its focus. The company announced in February that it would explore a sale of TheFork.

Activist pressure

The divestiture follows pressure from activist investor Starboard Value, which announced in February that it planned to nominate director candidates to Tripadvisor's board.

In response, Tripadvisor said its board and management were focused on pursuing all avenues to drive value for shareholders. The company has realigned its business around experiences, such as tours and activities, and launched a significant cost-cutting program.

Focus on experiences

Tripadvisor's experiences business, led by its Viator platform, has become its main growth engine. In the second quarter, experiences bookings grew 5%, and Viator grew 10%.

The company's traditional hotel review and advertising business has faced pressure as travelers increasingly turn to Google and artificial intelligence tools to plan trips.

Earnings Thursday

Tripadvisor will report third-quarter results before the market opens Thursday, Nov. 5, with a conference call at 8:30 a.m. Eastern time.

Analysts expect earnings of about 44 cents per share on revenue of about $448 million, according to MarketBeat.

Options trading suggests the stock could move about 12% in either direction after the report, according to data compiled by Bloomberg.

Tripadvisor's shares have reacted sharply to recent earnings. The stock fell 28.5% after its second-quarter report in August, when revenue came in well below consensus estimates, and dropped 18.1% after its fourth-quarter report in February.

A tough year

Tripadvisor shares have struggled. The stock has traded between $8.02 and $17.53 over the past 52 weeks and remains near the low end of that range.

The company's market value is about $1.1 billion. Analysts have a consensus rating of "reduce," with an average price target of about $14, according to MarketBeat.

Travel backdrop

The broader travel sector has been volatile this year amid the conflict in the Middle East, which has disrupted oil supplies through the Strait of Hormuz and driven up fuel costs for airlines.

Travel stocks have often rallied on signs of progress toward peace that could bring oil prices down.

What's next

Investors will look for details Thursday on how Tripadvisor plans to use the proceeds from the TheFork sale, as well as trends in its experiences business and traffic to its core platform.

With the stock near multi-year lows and an activist investor involved, the earnings report could prove a key test for the company's turnaround strategy.