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Trivago Stock Soars on Positive Profit News

Trivago stock got a major boost on Wednesday following the release of its earnings report for the third quarter of 2018.

Trivago Stock Soars on Positive Profit News

Source: Shutterstock

The good news from Trivago (NASDAQ:TRVG) comes from its net income of €10.1 million. This marks a return to profitability for the German tech company and is a boon to Trivago stock. For comparison, the company reported a net loss of €7.7 million for the third quarter of 2017.

“Our aim was to return to profitability in a sustainable way by reducing inefficiencies and getting the business back on track,” Axel Hefer, CFO of Trivago, said in a statement. “We believe we are now well-positioned moving forward and have adjusted our guidance to reflect our improved outlook.”

The update to Trivago guidance for is for the full year of 2018. Due to the performance of its most recent quarter, the company is increasing its Adjusted EBITDA for the quarter to be between flat and a loss of €10 million. This is also likely helping Trivago stock today.

Trivago also notes that it reported revenue of €253.70 million for the third quarter of the year. This is down from the company’s revenue of €287.90 million reported during the same period of the year prior. It also doesn’t match Wall Street’s revenue estimate of $262.99 million for the quarter. However, this wasn’t enough to dampen the good news for TRVG stock today.

Trivago says that the drop in revenue for the third quarter of 2018 has to do with its improvements for its Return on Advertising Spend. This was due to the company’s efforts to return to profitability during the quarter.

TRVG stock was up 16% as of Wednesday afternoon, but is down 29% year-to-date.

As of this writing, William White did not hold a position in any of the aforementioned securities.

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