TripAdvisor, Clear Secure new buys at Goldman Sachs on profitability upside

Goldman Sachs had initiated coverage of TripAdvisor (NASDAQ:TRIP) and Clear Secure (NYSE:YOU) as both travel-related companies are poised for further growth.

The firm puts a $22 price target (35% upside based on Monday's close) on TripAdvisor (TRIP) and $24 for Clear Secure (YOU) (~38% upside).

Analyst Ben Miller is bullish on TripAdvisor for several reasons. He sees the company having more than 50% of its revenue from high growth marketplace businesses such as Viator where it has a large share. Second, while he concedes that the company's metasearch channel is losing its share of travel advertising revenue, this is already priced in.

Miller added that the company could be poised for profitability upside as Viator and TheFor become profitable and its core return to pre-COVID margin. He also sees the company generating high levels of free cash that could help GAAP EPS.

Finally, he believes that TripAdvisor's valuation is "compelling relative to history" particularly when viewing the company on a sum-of-the-parts basis.