TCOM Should I Buy
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Trip.com Group Ltd (TCOM) is currently not a strong buy for a beginner investor with a long-term strategy. While the company has shown strong financial growth in the latest quarter, the ongoing regulatory investigation, class action lawsuit, and negative news sentiment create significant risks. Additionally, the technical indicators and options data do not suggest a compelling entry point at this time.
The MACD histogram is positive at 0.389, indicating a bullish trend, but it is contracting. RSI is neutral at 43.516, showing no clear overbought or oversold conditions. Moving averages are converging, signaling indecision in price movement. Key support is at 51.452, and resistance is at 55.249. The stock is trading near its pivot level of 53.351, suggesting limited momentum.
Hedge funds have significantly increased their buying activity, up 118.94% over the last quarter.
The company reported strong Q4 financials with revenue up 20.83% YoY and net income up 98.38% YoY.
Trip.com is under investigation by China's market regulator for alleged antitrust conduct, leading to a 17% drop in stock price.
A class action lawsuit has been filed against the company for misrepresenting regulatory risks associated with its AI pricing tool.
Negative news sentiment surrounding regulatory and legal issues.
In Q4 2025, the company demonstrated strong financial performance with revenue increasing by 20.83% YoY, net income up by 98.38% YoY, and EPS growing by 100.33% YoY. However, gross margin slightly declined by 0.40% YoY to 78.96.
Analysts have lowered their price targets across the board, with JPMorgan, Barclays, Benchmark, TD Cowen, and Mizuho reducing targets to a range of $68-$79. Despite the target cuts, most analysts maintain a positive outlook with Buy or Overweight ratings, citing strong revenue growth but acknowledging margin pressures and regulatory risks.
