Trivago Stakes Its Claim as a Recovery Stock

Few sectors have been hit harder by the coronavirus pandemic than travel thus far. Coming into its third-quarter report, its third update during the crisis, Trivago (NASDAQ: TRVG) investors may have been looking for signs of an inflection point, following a dismal second quarter. The stock popped briefly earlier this week after the company released solid third-quarter earnings numbers as shares opened 12.6% higher. However, the hotel-booking specialist quickly gave up most of those gains, though it was unclear why.

Revenue in the quarter tumbled 76% to $70.9 billion, which missed estimates at $81.9 million. But in a difficult environment, the company managed to deliver positive adjusted EBITDA of 6.1 million euros, down from 11.3 million euros in the quarter a year ago. That result shows the flexibility in the company's business model, as the online travel agency significantly scaled down marketing spending, essentially cutting its TV ads everywhere except Europe. This, along with 20 million euros in cost cuts around a restructuring earlier in the year, helped deliver the adjusted EBITDA profit.

Image source: Trivago.

Source Fool.com