TCOM: Overseas Holiday Demand Will Drive Q4 Momentum And Support Upside

Analysts have nudged their price target for Trip.com Group modestly higher to approximately $86 per share from about $85, citing stronger than expected Q3 performance and an improving Q4 outlook supported by resilient travel demand despite broader consumption headwinds.

Analyst Commentary

Analyst commentary around Trip.com Group remains largely constructive, with recent target hikes reflecting confidence in the company’s ability to execute on growth initiatives despite a softer macro consumption backdrop.

Bullish Takeaways

• Bullish analysts highlight Q3 results as solid, noting upside driven by strong hotel bookings during peak summer travel and October Golden Week, which reinforces the company’s ability to monetize seasonal demand and support a higher valuation multiple.
• Expectations for Q4 net revenue growth of around the high teens year over year, with an acceleration versus Q3, are seen as evidence of durable demand momentum and effective international expansion, underpinning upward revisions to price targets.
• Robust holiday demand in overseas markets is viewed as a strategic offset to China’s seasonally weaker quarter, signaling improved geographic diversification and reduced earnings volatility, which supports confidence in medium term growth visibility.
• Analysts cite Trip.com as a relative bright spot in a slowing consumption environment, arguing that the company’s scale, brand strength, and tech driven platform advantages position it to take share and justify a premium versus broader China internet peers.

Bearish Takeaways

• More cautious analysts point out that recent price target increases are incremental rather than transformational, suggesting that a meaningful portion of the recovery and growth story may already be reflected in the current share price.
• Reliance on holiday peaks and promotional periods to drive outperformance raises questions about the sustainability of elevated growth rates once travel normalization matures and compares become more challenging.
• Exposure to broader macro and consumption headwinds in China, even if partially offset by overseas strength, leaves the business vulnerable to sentiment swings and policy shifts that could pressure multiples in the near term.
• Some investors remain watchful on execution risk around continued international expansion and product investment, with any missteps in marketing efficiency or margin management potentially limiting further upside to earnings and valuation.

What's in the News

• Dunhuang partners with Trip.com Group on digital upgrades and cultural engagement initiatives, including multilingual ticket vending at Mogao Caves and a dedicated Dunhuang theme page on Trip.com to attract more inbound tourists along the Silk Road corridor (Key Developments).
• Trip.com Group co-organises the "NIHAO! CHINA" 2025 Asian Tour Operators' China Trip, hosting over 100 travel delegates from across Asia to showcase China's cultural resources and tourism cooperation potential, with Dunhuang as the anchor destination of the Colourful Silk Road Tour (Key Developments).
• Trip.com Group's board schedules a meeting for November 17, 2025 to review and approve financial results for the quarter ended September 30, 2025 and consider their publication (Key Developments).

Valuation Changes

• Fair Value: nudged slightly higher from approximately $85.81 to about $86.04 per share, reflecting a modest upward revision in intrinsic valuation.
• Discount Rate: increased marginally from about 8.01 percent to roughly 8.09 percent, implying a slightly higher required return embedded in the valuation model.
• Revenue Growth: edged up fractionally from around 13.21 percent to approximately 13.21 percent, indicating a very small improvement in long term growth expectations.
• Net Profit Margin: eased slightly lower from about 26.10 percent to roughly 26.07 percent, signaling a minimal reduction in projected profitability.
• Future P/E: inched higher from roughly 22.29x to about 22.35x, suggesting a small increase in the multiple investors may be willing to pay for forward earnings.