What to keep an eye on when it comes to TripAdvisor's earnings

TripAdvisor shareholders received some good news. They have gotten the best returns in the entire market last year thanks to TripAdvisor's stock shooting up by 56%. This is a stark comparison to its 6% drop in the S&P 500. 

Yet the foundation for that strong performance was set by low investor expectations about the business following two consecutive outlook downgrades by management in 2017.

Coming into its first earnings report of 2019, TripAdvisor has a much higher bar to clear if it wants to surprise Wall Street with better-than-expected operating and financial metrics. Here are the key trends for shareholders as the company closes fiscal 2018, and looks to a new year.

Growth wins and losses

TripAdvisor's core hotel-booking segment hasn't grown in over a year because of a variety of challenges. These include broader industry issues like weak bidding rates for online advertising. But the bigger factor has been management's shift away from spending on its own low-return marketing initiatives. Pulling back on those programs led to lower traffic on its travel sites, a problem that has been compounded by the company's transition to a fully mobile-based booking service.

Trends have shown improvement in recent months, though, and revenue per hotel shopper even cracked back into positive territory last quarter after having declined for over a year. These wins have CEO Stephen Kaufer and his team feeling confident that they'll get the hotel segment back to growth as early as the fourth quarter to mark an important rebound from the 4% drop investors saw through the first nine months of the year.

TripAdvisor's non-hotel business, which includes bookings for attractions, restaurants, and vacation rentals, is expected to grow at a similar 25% clip. Executives have big plans for this segment, and these high expectations have been bolstered by the fact that the division has shot up to represent almost a third of the broader business in 2018, from less than 10% in 2014.

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