On May 22, Trip.com fell 5.31% in pre-market trading, trading at $45.55/share, with trading volume of $1.9873 million.

The decline follows a widely circulated deep research report highlighting several financial red flags. The report notes that adjusted EBITDA margins declined from 32% to 30%, while costs rose 21% and sales expenses surged 25%, significantly outpacing revenue growth of 17%. Gross margins also slipped from 81.2% to 80.6%, contrary to expected scale efficiencies for a platform business.

Additionally, the report flags 62.2 billion yuan in goodwill — representing 36% of shareholders equity — primarily from acquisitions of Qunar and Skyscanner, exceeding the 30% caution threshold. Accounts receivable growth of 22.3% also outpaced revenue growth, raising collection quality concerns. The report concludes that international expansion through Trip.com requires heavy marketing investment with brand-building far from complete, suggesting elevated expense ratios may persist.

Separately, recent regulatory scrutiny over misleading consumer practices may be adding to investor unease, with reports indicating certain problematic backend practices continue despite surface-level changes.

(The above content is based on publicly available market information, generated by a program or algorithm, and is intended solely as a stock movement alert. It does not constitute investment advice or a basis for trading decisions.)