Trip.com Group Limited (TCOM): A Bull Case Theory

We came across a bullish thesis on Trip.com Group Limited on X.com by pandawatch88. In this article, we will summarize the bulls’ thesis on TCOM. Trip.com Group Limited 's share was trading at $72.50 as of September 10th. TCOM’s trailing and forward P/E were 19.96 and 17.33 respectively according to Yahoo Finance.

Trip.com Group Ltd. (TCOM) presents a compelling investment case, despite a modest 20x PE valuation and 5% free cash flow yield, reflecting a mature, fundamentally sound business rather than a “hidden gem.” The stock has lagged this year (-8% YTD) against peers like Tencent (+24%), largely due to investor concerns over margin pressure from ongoing investments in Asia and Europe. Yet the company retains a strong growth story: it is a dominant brand in China, positioned advantageously in an oversupplied hotel market, with high-quality products and services, a seasoned founder-CEO leadership, and resilient post-COVID fundamentals. China’s massive underpenetrated travel market, where hundreds of millions have yet to fly, offers long-term growth upside.

International expansion further strengthens TCOM’s opportunity, leveraging proprietary Chinese app and algorithm technology and mobilizing 700 million Chinese MAUs to attract attention and partnerships from hotels and transport providers abroad, an advantage over peers like Meituan. Key catalysts expected in 2H25 include: margins declining less than anticipated through higher-margin outbound travel and improved regional operations; increased capital returns following the MMYT stake sale, dividends, and potential buybacks; and rising visibility as market share crosses 10% internationally, attracting analyst coverage and investor attention. The upcoming Klook IPO may also amplify focus on Chinese internet players expanding in Asia.

Metrics support the thesis: revenue growth and margin expansion since 2019 are comparable to Booking, with TCOM trading at 20x PE versus Booking at 30x PE. Upside scenarios include 15% top-line growth, margin expansion to 35%, and multiple expansion, potentially tripling returns over five years. Base-case projections maintain margins and multiples, offering 2x returns, while downside risks include competitive pressures, AI disruption, or missed catalysts causing a 25% decline. Overall, TCOM combines strong fundamentals, strategic growth levers, and attractive risk/reward.

Previously we covered a bullish thesis on Trip.com Group Limited by Acid Investments in February 2025, which highlighted the company’s strong revenue growth, aggressive reinvestment strategy, and expanding international presence. The company's stock price has appreciated approximately by 27% since our coverage. This is because the thesis played out. pandawatch88 shares a similar perspective but emphasizes margin resilience, capital returns, and Chinese outbound travel growth as key catalysts.

Trip.com Group Limited is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 40 hedge fund portfolios held TCOM at the end of the second quarter which was 46 in the previous quarter. While we acknowledge the potential of TCOM as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.