Trip.com Group Limited

Based on a comprehensive analysis of TCOM, here is an assessment of its investment potential.

Technical Analysis The stock is technically weak, having underperformed the market significantly and trading near its 52-week low. A negative beta indicates it has moved opposite the broader market, which contributed to its steep decline. While this positions the stock in technically oversold territory, it currently lacks positive momentum.

Fundamental Analysis Fundamentally, TCOM is strong, with impressive quarterly revenue growth and extremely high profitability margins. The company maintains excellent financial health with low debt and strong interest coverage. High gross margins and a solid return on equity reflect efficient operations, though the negative cash conversion cycle warrants monitoring.

Valuation & Risk Valuation metrics are compelling, with a very low forward P/E and an exceptionally low PEG ratio suggesting significant undervaluation relative to growth prospects. The primary risk is volatility, as evidenced by the large maximum drawdown, though the negative beta may offer some defensive characteristics.

Buy Recommendation TCOM presents a compelling opportunity for value-oriented investors willing to endure near-term volatility. The significant disconnect between its strong fundamentals, deeply undervalued metrics, and negative technical momentum creates a potential buying opportunity. For investors with a medium-to-long-term horizon, the current price level appears attractive despite the recent downward trend. *(Note: This is not investment advice, for reference only.)*

RockFlow Model Forecast: Three Scenarios for 2026

Based on a comprehensive analysis, here is a 12-month outlook for TCOM:

12-Month Outlook for TCOM

The primary catalyst for a potential rebound is the significant disconnect between its deeply undervalued metrics and strong fundamentals, which could attract value investors and lead to a price correction. Key drivers will be the continuation of its impressive revenue growth and high profitability, demonstrating the underlying business strength despite the weak stock performance.

The main risk remains high volatility and a potential continuation of the negative technical momentum, which could keep the stock subdued in the near term despite its attractive valuation. A target price is challenging without a consensus, but a move toward fair value could suggest a range of $65 - $75 over 12 months, representing a meaningful upside from the current depressed level near its 52-week low.

Wall Street Consensus

Most Wall Street analysts are optimistic about Trip.com Group Limited's 12-month outlook, with consensus target around $55.34, indicating expected upside potential.

Overall, TCOM has investment potential but also faces challenges. Here are key factors to weigh before investing.

TCOM has demonstrated significant underperformance with substantial price declines over recent periods.

The stock has experienced sharp declines of 8.48% over one month and 25.74% over three months, significantly underperforming the market by 27.59% during the latter period. This negative beta of -0.177 suggests the stock has moved opposite to market trends, amplifying its relative weakness during the recent downturn.

Currently trading at $55.34, TCOM sits just 8% above its 52-week low of $51.35 but remains 30% below its 52-week high of $78.99, positioning it near oversold territory. The maximum drawdown of -31.07% over the past year further confirms the stock's substantial decline from peak levels.

Revenue & Profitability TCOM demonstrated strong quarterly revenue growth from CNY 14.8B to CNY 18.3B, representing a 23.6% sequential increase. The company maintained excellent profitability with a remarkably high net income ratio of 108.5% in Q3, primarily driven by substantial other income that significantly boosted bottom-line results. Operating margins remained healthy at 30.4%, indicating strong core business performance despite elevated R&D and marketing expenses.

Financial Health The company maintains a conservative debt profile with a low debt ratio of 11.8% and a strong interest coverage ratio of 30.5x. However, the absence of operating cash flow data raises questions about current liquidity management, though the current ratio of 1.48 suggests adequate short-term solvency. The negative cash conversion cycle of -459.7 days indicates TCOM enjoys favorable working capital terms with suppliers.

Operational Efficiency TCOM achieved a solid return on equity of 11.8%, supported by moderate asset efficiency with an asset turnover of 0.07. The company's operational performance is characterized by high gross margins of 81.7%, though the modest ROE suggests potential for improved capital allocation efficiency. The fixed asset turnover of 2.9 indicates reasonable utilization of property and equipment investments.

Valuation Level: TCOM appears significantly undervalued based on its forward PE ratio of approximately 4.5, which is substantially lower than its trailing PE of 14.8. This sharp discount suggests strong earnings growth expectations are priced in, further supported by an exceptionally low PEG ratio of 0.014, indicating the stock trades at a fraction of its projected growth rate. The EV/EBITDA of 14.1 aligns with a reasonable enterprise value relative to operating performance, reinforcing the undervaluation thesis.

Peer Comparison: A peer comparison cannot be conclusively performed due to the unavailability of industry average data. However, TCOM's low forward PE and PEG ratios would typically signal a competitive valuation advantage if the industry averages are higher, which is common in growth-oriented sectors. Investors should seek specific industry benchmarks to contextualize these metrics fully.

The stock exhibits unusual defensive characteristics with a negative beta (-0.177), suggesting it may move inversely to broad market movements, which could limit upside during bull markets while providing some downside protection. However, investors face significant volatility risk as evidenced by the substantial 31.07% maximum drawdown over the past year, indicating potential for sharp price declines during adverse conditions.

Other risks appear limited in severity, with no reported short interest suggesting minimal bearish sentiment from sophisticated investors. Given the lack of short interest and the company's market capitalization, liquidity risk is likely low, though investors should still monitor trading volumes and bid-ask spreads for any changes that could impact execution.