Trip.com Group Limited TCOM has gained 32.5% in the past six months, outperforming the Zacks Leisure and Recreation Services industry, the Zacks Consumer Discretionary sector and the S&P 500 Index. The detailed price performance is shown in the chart below.

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This China-based travel service provider is banking on investments made in several growth initiatives amid global travel demand. The company’s continuous efforts to enhance and diversify its offerings along with the artificial intelligence (AI)-driven technological revolution bode well.

The Zacks Consensus Estimate of the company’s 2025 earnings per share (EPS) has moved north from $3.77 to $3.98 in the past 60 days. The estimated value indicates 7.3% year-over-year growth. Also, during the same time frame, the earnings estimates for the first quarter of 2025 have trended upward to 88 cents from 87 cents, indicating 6% growth from a year ago. The company’s earnings surpassed expectations in each of the trailing four quarters, with the average surprise being 42.8%.

Let us discuss the factors why investors must consider adding this Zacks Rank #1 (Strong Buy) stock to their portfolio now.

What’s Driving Trip.com Stock?

Robust Travel Demand: Trip.com’s prospects are benefiting from the growing travel demand for both domestic and cross-border travel. With easing macro conditions across the globe, consumers seem to be optimistic, resulting in heightened travel sentiments.

The domestic Chinese market’s travel demand is strong, especially for inland and lesser-known destinations, contributing to the further development of local tourism. This backdrop, coupled with the company’s product offerings, is aiding its top-line growth. Moreover, on the international front, global businesses continue to witness strong momentum, resulting in increased air ticket bookings and hotel reservations.

Growth Investments: The company has consistently focused on several investments to enhance its product offerings against improving travel demand trends. The diversified portfolio of travel and hotel booking packages, which vary throughout the year during peak travel seasons and festivals, is an attractive aspect of Trip.com. Furthermore, its focus on technological advancements bodes well.

The company is continuously working on integrating AI into its services to offer better services to its customers and cater to more personalized demands. The trend across TCOM’s international OTA platform is noteworthy. This international OTA platform has become the most downloaded OTA app in various markets, including Hong Kong, Macau, Taiwan, South Korea, Singapore, Malaysia and Thailand, reflecting its strong presence in the APAC region. During the third quarter of 2024, air ticket and hotel bookings on the platform grew more than 60% year over year, with bookings from the APAC region increasing more than 70%. Trip.com aims to further foster the demand trends by using several marketing initiatives focused on the international OTA platform to support its global business.

Favorable Valuation Trends: Trip.com is currently trading at a discount compared with the industry peers on a forward 12-month price-to-earnings (P/E) ratio basis. The discounted valuation indicates that despite the recent stock price increase in the past six months, it remains an attractive option for investors looking for a suitable entry point.

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Furthermore, the company’s trailing 12-month return on equity (ROE) is indicative of its growth potential and focus on maintaining shareholder value. Its ROE of 12% compares favorably with the industry’s 1.2%, indicating more efficiency in using shareholders’ funds than peers.

Other Key Picks

Here are some other top-ranked stocks from the same sector.

Norwegian Cruise Line Holdings Ltd. NCLH currently sports a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

NCLH has a trailing four-quarter earnings surprise of 4.2%, on average. The stock has gained 47.4% in the past year. The Zacks Consensus Estimate for NCLH’s 2025 sales and EPS indicates growth of 8.4% and 25.2%, respectively, from the year-ago levels.

Atour Lifestyle Holdings Limited ATAT presently sports a Zacks Rank of 1. ATAT has a trailing four-quarter earnings surprise of 5.4%, on average. The stock has gained 52.2% in the past year.

The Zacks Consensus Estimate for ATAT’s 2025 sales and EPS indicates an increase of 28.1% and 24.6%, respectively, from the year-ago levels.

Universal Technical Institute, Inc. UTI currently sports a Zacks Rank of 1. UTI has a trailing four-quarter earnings surprise of 54.6%, on average. The stock has surged 101.3% in the past year.

The Zacks Consensus Estimate for UTI’s fiscal 2025 sales and EPS indicates an increase of 10.1% and 28%, respectively, from the year-ago levels.

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