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Shares of (NASDAQ: TCOM) were down 10.5% as of 3 p.m. ET Tuesday as the Chinese travel website’s strong quarterly results were overshadowed by a notable analyst downgrade.

On the former,’s quarterly revenue nearly doubled from the same year-ago period to 13.75 billion Chinese yuan (U.S. $1.9 billion), translating to adjusted earnings of 7.26 yuan ($1) per American depositary share (ADS). Most analysts were only expecting earnings of 4.93 yuan per share on revenue of 13.6 billion yuan.

On’s “robust” quarter management noted that its domestic and international businesses each “continued to show robust recovery” during the quarter. Domestic hotel bookings climbed over 90% year over year and rose more than 70% compared to pre-COVID levels for the same period in 2019. Outbound hotel and air reservations also recovered to around 80% of pre-COVID levels, outpacing the broader industry’s recovery rate of 50% as measured by international air passenger volume.

“This shows just how eager travelers are to explore the world,” stated Executive Chairman James Liang. “Looking ahead, we will continue our efforts in expanding our global presence and cultivating AI-related initiatives, laying the foundation for continued growth of our company.”

Has Chinese travel demand peaked?

On the heels of’s impressive quarterly update, however — and noting shares of were up around 33% over the past year leading into this report — analysts at Nomura downgraded the stock to neutral from buy. The firm cited the likelihood that domestic travel growth has peaked in the country given pent-up demand, and it warned that the Chinese travel industry may weaken in the coming quarters as consumers in the country grow more cautious with their spending. Nomura also lowered its per-share price target on from $48 to $41, which still marks a solid 25% premium from the stock’s current levels.

It remains to be seen, of course, whether Nomura’s words of caution will prove correct. But skittish investors are obviously using the news as an excuse to take some profits off the table today.

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