What’s Next For Expedia Stock After An Upbeat Q4?

Expedia (NASDAQ: EXPE) stock remains up by about 33% since the beginning of 2024, outperforming the S&P 500 which remains up by 27% during the same period. In comparison, peer Tripadvisor (NASDAQ: TRIP) is down 18% during the same period. So, what’s behind Expedia’s impressive performance?

Key drivers of growth include an uptick in travel trends, with notable improvements in the U.S. market compared to previous quarters, as well as robust international demand, particularly in the Asia-Pacific region. Expedia’s growth strategy yielded positive results, driven by its successful expansion into business-to-business (B2B) travel bookings, now accounting for 27% of total bookings, and strategic enhancements to its product portfolio, including the Vrbo platform. Additionally, the company’s decision to reinstate its quarterly dividend at $0.40 per share was well-received by investors, leading to a surge in its stock price. Expedia’s strong financial performance has also played a role, with the company reporting better-than-expected earnings and revenue growth in the recent Q4. Looking ahead, Expedia projects gross bookings and revenue growth of 4-6% for 2025, with an expected EBITDA margin expansion of 50 basis points. That said, if you want upside with a smoother ride than an individual stock, consider the High Quality portfolio, which has outperformed the S&P, and clocked >91% returns since inception.

Expedia’s full-year 2024 revenue reached $13.7 billion, reflecting a strong 7% year-over-year  (y-o-y) increase. Its total gross bookings reached $110.0 billion, also up 7% y-o-y. It should be noted that B2B performance was particularly strong with revenue growing 21% y-o-y to $4.1 billion. This growth is attributed to robust corporate partnerships and heightened demand from business clients. In the business-to-consumer (B2C) segment, its revenues grew marginally to $9.3 billion. Brand Expedia saw a 9% growth in room nights. Lodging revenue increased 7% and air revenues were up 4% y-o-y. Financial highlights included a 69% increase in diluted earnings to $8.95 per share and a 25% y-o-y growth in adjusted earnings to $12.11 per share. The company’s EBITDA was up 9% y-o-y to $3 billion in FY’24.

The increase in EXPE stock over the last 4-year period has been far from consistent, with annual returns being considerably more volatile than the S&P 500. Returns for the stock were 36% in 2021, -52% in 2022, 73% in 2023, and 23% in 2024. The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, is considerably less volatile. And it has comfortably outperformed the S&P 500 over the last 4-year 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.

We forecast Expedia’s revenues to be $14.5 billion for the fiscal year 2025, up 6% y-o-y. Given the changes to our revenues and earnings forecast, we have revised Expedia’s valuation to about $205 per share, based on $11.24 expected GAAP EPS and an 18.2x P/E multiple for the fiscal year 2025 – almost in line with the current market price (Feb. 14).

Expedia Group is capitalizing on the sustained strength of global travel demand and expanded margins across its B2B and B2C business segments. The company remains committed to strategic investments in technology innovation and customer loyalty initiatives, including the integration of artificial intelligence capabilities. Furthermore, Expedia is creating value for shareholders through targeted share buybacks and its loyalty program, “One Key,” which is driving enhanced customer retention and repeat business.

It is helpful to see how its peers stack up. Expedia 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.

[1] Returns as of 2/13/2025
[2] Cumulative total returns since the end of 2016

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