Down 23% This Year, What Lies Ahead For Expedia Stock Post Q2 Results?

Expedia (NASDAQ: EXPE), a travel company providing everything from airline tickets, hotel rooms, and car rentals, to cruises, is scheduled to announce its fiscal second-quarter results on Thursday, August 8. We expect Expedia’s stock to likely see little to no movement with revenues and earnings matching consensus estimates in Q2 results. The company is benefiting from travel demand that has remained resilient despite macro headwinds. The B2B and B2C segment has performed well for the company’s retail side in terms of growth, while also driving margins higher. However, Vrbo segment’s recovery post-technical migration was slower than expected, impacting the overall performance in Q1. The company expects its full-year revenue growth to be lower than initially anticipated for 2024, prompting a revision of the full-year guidance to a range of mid- to high single-digit top-line growth. Expedia’s stock is down 23% so far YTD. In comparison, Expedia’s peer Booking Holdings (NASDAQ: BKNG) stock fell 3% year-to-date to $3417.

EXPE stock has seen little change, moving slightly from levels of $130 in early January 2021 to around $118 now, vs. an increase of about 40% for the S&P 500 over this roughly 3-year period. Overall, the performance of EXPE stock with respect to the index has been quite volatile. Returns for the stock were 36% in 2021, -52% in 2022, and 73% in 2023. In comparison, returns for the S&P 500 have been 27% in 2021, -19% in 2022, and 24% in 2023 – indicating that EXPE underperformed the S&P in 2022. In fact, consistently beating the S&P 500 – in good times and bad – has been difficult over recent years for individual stocks; for heavyweights in the Consumer Discretionary sector including AMZN, TSLA, and HD, and even for the megacap stars GOOG, MSFT, and AAPL. In contrast, the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has outperformed the S&P 500 each year over the same period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride as evident in HQ Portfolio performance metrics. Given the current uncertain macroeconomic environment with high oil prices and elevated interest rates, could EXPE face a similar situation as it did in 2022 and underperform the S&P over the next 12 months – or will it see a strong jump?

Our forecast indicates that Expedia’s valuation is $122 per share, which is in line with the current market price. Look at our interactive dashboard analysis on Expedia Earnings Preview: What To Expect in Q2? for more details.

(1) Revenues and EPS expected to be in line with the consensus estimates

Trefis estimates Expedia’s Q2 2024 revenues to be around $3.5 Bil, in line with the consensus estimate. In Q1, the company grew to $2.9 billion, which was up 8% year-over-year (y-o-y), driven by strong performance in B2B, Brand Expedia, and advertising businesses. The company’s total gross bookings were $30.2 billion, an increase of 3% y-o-y. Booked room nights increased 7% y-o-y and lodging revenue improved by 4% in Q1. Expedia’s Q2 2024 earnings per share (EPS) is expected to come in at $3.07 as per Trefis analysis, matching the consensus estimate.

Expedia ended the quarter with strong liquidity of $8.2 billion, supported by an unrestricted cash balance of $5.7 billion and an undrawn revolving line of credit of $2.5 billion. Its debt was approx $6.3 billion at the end of Q1.

(2) Stock price estimate in line with the current market price

Going by our Expedia’s Valuation, with an EPS estimate of around $8.83 and a P/E multiple of around 13.8x in fiscal 2024, this translates into a price of $122, which is almost in line with the current market price.

It is helpful to see how its peers stack up. EXPE Peers shows how Expedia compares against its peers on metrics that matter. You will find other useful comparisons for companies across industries at Peer Comparisons.