How Low Could Expedia Stock Go If A Real Shock Follows This Slide?
Expedia (EXPE) stock fell 7.7% on September 23, leaving it about 24% below its August 24 high of $339. Yet the company’s latest results beat its forecast, and over the past 12 months the stock has still returned about 17%, roughly in line with the S&P 500. So how far could Expedia go in a real market shock?
Does Expedia’s Own News Explain The Slide?
Expedia’s own results do not explain the slide. The pressure has come from outside: Morgan Stanley rated the stock Underweight on September 16, arguing Expedia is more exposed than its rivals to AI-driven shifts in travel search, and on September 23 online travel stocks fell broadly on concerns that Meta’s Muse AI agent could book trips without going through aggregators. Its second-quarter results on August 5 beat the high end of its own revenue and profit expectations for the fifth quarter in a row, by management’s account, and it raised its full-year outlook. In September, it announced its largest-ever product launch for Vrbo, its vacation-rental brand.
Management did expect bookings growth to slow in the third quarter of 2026 against tougher comparisons. Analysts also pressed it on competition in B2B, which supplies travel to more than 70,000 partners. Both points have been public since August 5.
Is Expedia Actually Selling Less Travel?
No. Revenue over the trailing twelve months grew 12.0%, faster than its three-year average growth of 8.6%. The operating margin, at 17.4%, is its highest in three years and well above its three-year average of 13.1%.
Management credits the second quarter’s gain in adjusted EBITDA margin to tight expense management and consumer marketing leverage: consumer bookings grew 8% while marketing spend rose only 1%. It expects those gains to moderate in the third quarter as it laps the cost cuts of 2025, invests in B2B growth and faces currency headwinds, though it raised its full-year margin outlook.
Expedia’s exposure is travel demand, and it already bends where the economy is weak. Europe stayed under pressure in the second quarter, especially outbound travel, as macro headwinds and reduced air capacity weighed on demand.
How Much Further Could Expedia Fall In A Real Shock?
Further than the market, if history holds: in every major market shock since 2007, Expedia fell harder than the S&P 500 — from 81% versus 53% in the 2008-2009 Global Financial Crisis to 34% versus 19% in the 2025 tariff shock. These falls are measured from a peak, not from today’s price, which is already about 24% below its August high. The deepest were the 2008-2009 Global Financial Crisis at 81%, the 2020 COVID-19 crash at 62%, and the 2022 inflation shock at 52%. That 81% fall alone would have cut about 8% from a whole portfolio holding Expedia at a 10% weight, and about 16% at a 20% weight, before any losses on its other holdings.
The 2025 tariff shock, the newest, is the fairest test of today’s business: Expedia fell 34% while the S&P 500 fell 19%.
Recent recoveries have been quick. Measured from the low, Expedia regained its pre-shock high within about 4 months in each of the four shocks since 2023, and in about 8 months after the 2020 COVID-19 crash. The slowest were about 38 months after 2008-2009 and about 28 months after 2022.
So the old profile still fits today’s Expedia, stronger margins and all: a steeper fall than the market’s, then months to recover, or years in the worst cases. If that is more than you could sit through, compare it with the stocks that have held up best in past sell-offs.
Would You Still Hold Expedia Through A Slide That Lasts Years?
How much do you own? What would you sell if the wait ran long?
Answering those questions one stock at a time is hard, which is why our rule-based High Quality Portfolio is built as a whole.
If you would rather judge the entry, our Dip Buyer’s Playbook ranks fallen names on whether the business can carry them back. The Trefis High Quality (HQ) Portfolio has a track record of outpacing a benchmark that combines the three major indices.