Expedia stock makes impressive comeback.

Last Updated: 8. Januar 2024By

Expedia stock climbed a whopping 73% in the past year. The booming travel market and higher prices brought a glimmer of hope for the company’s operations. The market value of the US corporation is now around $20 billion.

Expedia in Profile Before delving into the numbers, a few words about the history of the US corporation. Expedia is the world’s largest online travel agency. The company started in 1996 as a spin-off of Microsoft. Both private and business travelers can find a huge selection of last-minute deals and travel bargains, catalog and city trips, scheduled and charter flights, hotels, and rental cars. In addition, the „On Location“ category offers attractive services such as tickets, sightseeing tours, transfers, and restaurant reservations, even without booking a trip.

Recently, the company has made significant investments in the private vacation rental sector (VRBO) in order to compete with rivals Airbnb and Booking in the booming market for alternative rentals.

Third quarter with accelerated revenue growth In the past third quarter, the travel specialist delighted its investors with a resurgent growth dynamic: revenue rose by 8.6% to $3.93 billion. This represents an acceleration in revenue growth, as the previous quarter saw growth of „only“ 6%. Expedia reported 89.3 million room nights in the third quarter of fiscal year 2023, an increase of 9% from the previous year (previous quarter: 89.7 million).

However, Expedia had to endure a decline in profit. In raw numbers, that translates to a profit of $305 million, or $2.87 per share. This is a 19% decrease from the previous year’s quarter.

Adjusted for special factors, however, there was a significantly higher profit of $5.41 per share, an increase of 33% from the same quarter of the previous year, which significantly exceeded analyst estimates. Prior to the release of the results, experts had estimated earnings per share of $5.

„One Key“ program aims to retain customers In July 2023, Seattle-based Expedia introduced a long-awaited loyalty program called „One Key,“ which allows travelers to earn and redeem rewards across the entire platform, for example by accumulating cash on the vacation rental platform Vrbo and using it to book a flight on Expedia.com or a room on Hotels.com. This brings together four different loyalty programs under one roof.

Management does not give annual forecast Meanwhile, the Expedia management has not provided a concrete forecast for the rest of the year. However, a new $5 billion share buyback program has been approved.

Analysts are currently divided on the stock’s prospects. Of the 33 experts who follow the stock, 17 recommend buying the shares. Another 14 experts rate the stock as a hold position, while two bankers recommend selling. Based on the average earnings estimates for 2024 of $11.54 per share, the price-earnings ratio remains moderate at 12.6 despite the stock’s rally. The analysts‘ consensus price target is $144.99, which is more or less in line with the last closing price from last Friday ($146.31).