What’s Next For Expedia’s Stock?
Expedia (NASDAQ: EXPE) is a travel company providing everything from airline tickets, to hotel rooms, and car rentals. The company’s stock has declined by almost 8% over the last twenty-one trading days (one month) and currently stands at around $94. The primary reason for this decline is a combination of high inflation, rising interest rates, and slowing economic growth pressuring consumer spending. However, the travel company saw a beat on both the top and bottom lines in the last fiscal Q2. In Q2, EXPE’s adjusted EPS of $1.96 beat expectations by $0.40, reversing last year’s loss of -$1.13. The company’s revenue soared 51% year-over-year to $3.2 billion, topping estimates by $190 million. Last year, the same period was hit by more severe pandemic disruptions. Despite that, this quarter was solid from a variety of perspectives. Expedia’s Average Daily Rates (ADR’s) increased by 9% over the second quarter of 2021. Air travel services, the company’s smallest segment, also saw a 21% increase in revenue per ticket. That said, a topline contribution of $648 million contributed to an adjusted EBITDA of $647 million, nearly tripling from $201 million last year and 14% higher than in Q2 2019.
In terms of the balance sheet, Expedia showcased a strong point. The company ended the quarter with $5.6 billion in cash and equivalents and over $6.7 billion in long-term debt (with a leverage ratio under 1x). In particular, the company has paid down about $1 billion in debt since the beginning of this year and the expectation is for cash flows to remain elevated through Q3.
Is EXPE stock poised to decline in the short term or are gains looking more likely? Based on our machine learning analysis of trends in the stock price over the last ten years, there is a 65% chance of a rise in EXPE stock over the next month (twenty-one trading days). See our analysis of EXPE’s Stock Chance Of Rise for more details.
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Calculation of ‘Event Probability’ and ‘Chance of rising’ using last ten years’ data
 Returns of 2.4% or higher over a five-day period on 828 occasions out of 2516 (33%); Stock rose in the next five days in 405 of these 828 instances (49%)
 Returns of -13% or lower over a ten-day period on 96 occasions out of 2516 (4%); Stock rose in the next ten days in 47 of these 96 instances (49%)
 Returns of -8.2% or lower over a twenty-one-day period on 312 occasions out of 2514 (12%); Stock rose in the next twenty-one days in 203 of these 312 instances (65%)
It is helpful to see how its peers stack up. EXPE Peers shows how EXPE stock compares against peers on metrics that matter. You will find other useful comparisons for companies across industries at Peer Comparisons.
With inflation rising and the Fed raising interest rates, EXPE stock has fallen almost 50% this year. Can it drop more? See how low can EXPE stock go by comparing its decline in previous market crashes. Here is a performance summary of all stocks in previous market crashes.
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|S&P 500 Return||-8%||-24%||63%|
|Trefis Multi-Strategy Portfolio||-12%||-26%||195%|
 Month-to-date and year-to-date as of 9/30/2022
 Cumulative total returns since the end of 2016
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