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Seattle, Washington-based Expedia Group, Inc. (EXPE) operates as an online travel company that provides travel products and services to leisure and corporate travelers. Valued at $17.40 billion by market cap, the company facilitates memorable experiences for travelers through its family of brands, including Expedia, Hotels.com, Expedia Partner Solutions, Vrbo, Trivago, Travelocity, Hotwire, Wotif, Ebookers, CheapTickets, Expedia Group Media Solutions, CarRentals.com, and Expedia Cruises.
Shares of this leading online travel company have underperformed the broader market considerably over the past year. EXPE has gained 1.6% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 19.9%. In 2024, EXPE stock is down 19.2%, while the SPX is up 15.1% on a YTD basis.
Narrowing the focus, EXPE’s underperformance looks less pronounced compared to the Consumer Disc ETF Vanguard (VCR). The exchange-traded fund has gained about 9.8% over the past year. The ETF’s 4.5% returns on a YTD basis outshine the stock’s losses over the same time frame.
On May 3, EXPE shares fell more than 15% after the company lowered its full-year bookings guidance as its Vrbo rental unit has been slow to recover from its migration to Expedia’s platform. Investors were disappointed about the slowing growth heading into the summer months. For Q2, EXPE lowered its full-year guidance to a range of mid to high single-digit top-line growth with margins relatively in line compared to last year.
During Q1, the company’s EPS and revenue beat the analyst estimates. Its adjusted EPS of $0.21 beat Wall Street expectations of a loss per share of $0.37, and its revenue of $2.89 billion surpassed consensus estimates of $2.80 billion. Moreover, Q1 gross bookings of $30.16 billion were below the consensus estimates of $30.50 billion.
For the current fiscal year, ending in December, analysts expect EXPE to report an EPS growth of 25.3% to $9.32 on a diluted basis. The company’s earnings surprise history is impressive. It beat the consensus estimate in each of the last four quarters.
Among the 28 analysts covering EXPE stock, the consensus rating is a “Moderate Buy.” That’s based on eight “Strong Buy” ratings, one “Moderate Buy,” and 19 “Holds.”
This configuration is less bullish than three months ago, with 10 suggesting a “Strong Buy.”
Recently, Wells Fargo analyst Ken Gawrelski maintained a “Hold” rating on EXPE stock, reducing the price target to $149, implying a potential upside of 16.7% from current levels.
The mean price target of $147.52 represents a 15.5% premium to EXPE’s current price levels. The Street-high price target of $190 suggests an ambitious upside potential of 48.8%.
On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
