TCOMTrip.com Group Limited
Is the business good?
A genuinely good business: earnings fully cash-backed (1.1×) and margins widening.
Operating profit is fully backed by cash. Conversion is worsening vs a year ago.
Operating margin has widened over the past few years, the business is getting more profitable per dollar of sales.
Margin-driven, fat margins on slower asset turns. ROE 19% = margin × turnover × leverage.
Unless marked, from derived.
Where this answer is blind. The F-score rewards improvement, so an already-elite company can score mid-pack.
How good a business is TCOM?
Trip.com Group Limited earns 9.6% on the capital it employs against a 9.0% cost of capital, so the business is worth more the bigger it gets.
Return on invested capital · cost of capital 9.0% · 0.61 points above what the capital costs: growth creates value
- Operating margin
- 25%
Operating margin · Travel Services median 16% · fiscal year to FY2025
- Cash conversion
- 1.07×
Cash conversion · 1.64× a year ago · operating cash flow covers the operating profit after tax
- Share count, year on year
- +1.4%
Share count, year on year · shareholders own a smaller slice than a year ago
| Year | Operating margin |
|---|---|
| FY2020 | −7.8% |
| FY2021 | −7.0% |
| FY2022 | 0.44% |
| FY2023 | 25% |
| FY2024 | 27% |
| FY2025 | 25% |
Details›
- Gross marginfiscal year to FY2025
- 81%
- Operating marginfiscal year to FY2025
- 25%
- Net marginfiscal year to FY2025
- 53%
- Free cash flow margin
- 22%
- R&D as % of revenue
- 24%
- Revenue, trailing twelve months
- $62.4B
- Free cash flow, trailing twelve months
- $13.6B
- Net income, trailing twelve months
- $33.3B
- Return on invested capitaloperating profit after tax ÷ debt + equity − cash
- 9.6%
Margins, capital and share counts from the statements as filed with the SEC; cash conversion is operating cash flow over operating profit after tax.
Travel Services
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