Expedia Down 55% vs. 25% For S&P. Will It Continue To Underperform?

Expedia’s (NASDAQ: EXPE) stock has lost a sizeable chunk of its value since the outbreak of coronavirus with the company’s share price falling nearly 55% since early February (1st Feb – 20th March) considering the impact that the outbreak and a broader economic slowdown could have on the global travel industry. A similar situation was seen in 2008 – when the stock fell 76% during the market crash (Oct ’07 – Mar ’09) and it recovered much better than the market at 223% (early 2010). As evident from the 2008 crisis, Expedia’s stock could likely rebound from its current level and outperform the broader benchmark S&P 500 once the crisis retreats. Trefis, in its interactive dashboard,  2007-08 vs. 2020 Crisis Comparison: How Did Expedia Stock Fare Compare with S&P 500? takes a look at how the company’s stock reacted to the economic crisis of 2008 and also compare its performance with the S&P 500.

On Monday, March 16, the stock markets fell 12%, the biggest sell-off since 1987, and one of the biggest drops of all time. A rapidly increasing number of Coronavirus cases worldwide has caused mounting concerns of a global economic slowdown. Although markets recovered around 6% on Tuesday, March 17, on expectations for massive federal stimulus to address the ongoing economic crisis, it then fell 5% on March 18th, marginally increased on 19th March, before reporting a 4% decline on 20th March.

We also provide a detailed comparison of -28% Coronavirus crash vs. four historic market crashes in a separate interactive dashboard.

Expedia Stock versus S&P 500 Over 2020 Coronavirus/Oil Price War Crisis

• Between March 9th and March 20th, Expedia’s stock has declined by over 43% and is down by about 55% since February 1, after the WHO declared a global health emergency.
• Over this period, the S&P 500 has declined by 16% and is down by over 28% since February 1, after the global health emergency was declared by the WHO

Expedia Stock versus the S&P 500 During 2007-08 Financial Crisis

• Expedia stock declined from levels of around $60 in October 2007 (the pre-crisis peak) to levels of around $14 in March 2009 (as the markets bottomed out) and recovered to levels of about $46 in early 2010.
• Through the crisis, Expedia’s stock declined by almost 76% from its approximate pre-crisis peak. This was higher than the S&P which fell by as much as 51%.
• However, the stock recovered strongly, rising by 223% between March 2009 and January 2010. In comparison, the S&P rose by about 48% over the same period.

Conclusion

While Expedia’s stock has declined due to the coronavirus and oil price war crisis, going by trends seen during the 2008 slowdown, it’s likely that it could bounce back strongly when the crisis winds down, and the growth from lower levels could potentially be higher than the broader S&P.

For more detailed charts and a timeline of the 2008 and 2020 crisis for different stocks, view our interactive dashboard analyses on coronavirus.

See all Trefis Price Estimates and Download Trefis Data here

What’s behind Trefis? See How It’s Powering New Collaboration and What-Ifs For CFOs and Finance Teams | Product, R&D, and Marketing Teams