The One Reason To Invest In Expedia Stock
Expedia (EXPE) stock has lost 13.7% over the past month, while the S&P 500 gained 0.6%. Yet one thing about the company has held for years: it keeps buying back its own stock. Expedia has 19.3% fewer shares than it had three years ago, and every share that remains owns a larger slice of the business. So what does that do for a shareholder?
How Much More Does Each Expedia Share Earn?
Expedia’s profit per share has grown about 10 points a year faster than its total profit. Earnings per share rose 41.3% per year over the past three years, while net income rose 31.3% per year. Expedia’s profit is now split among fewer shares, and that is where the gap comes from. The share count fell in each of those three years, most recently by 7.7%.
Expedia spent $1.92 billion on its own stock over the last twelve months and issued $0.41 billion of new stock as pay. The net $1.5 billion equals 4.7% of Expedia’s market value. You hold the same number of shares as before, but each one now claims more of what Expedia earns. The value of that claim still moves with the share price, as the stock’s fall over the past month shows. The buyback is only one thing that moves the price, besides profit growth and how much investors pay for each dollar of profit.
Expedia Pays For Buybacks From Its Own Cash Flow
The travel business produces far more cash than Expedia spends on buybacks. Free cash flow was $4.46 billion over the last twelve months, 2.09 times what the company spent on buybacks and dividends. So Expedia did not need to borrow or draw on its savings to shrink the share count.
The business is also earning more on each dollar of sales. Expedia’s operating margin was 17.4% over the last twelve months, up from 12.2% a year earlier. B2B, where Expedia sells travel through partner companies, is growing faster than the consumer business. B2B revenue rose 18.0% in fiscal 2025, against 2.2% for the consumer business.
Expedia is not weighed down by debt either. It holds $1.44 billion more cash than debt, and its operating profit covers its interest bill 7.7 times.
What Could Make Expedia Buy Back Less?
Expedia would buy back less if less cash came in, or if management chose to spend it elsewhere. Slower growth is one worry. Management forecast revenue growth of about 5% to 8% for the third quarter of 2026, against the 14% Expedia reported for the second quarter. Even so, management raised its full-year forecast on the August 5, 2026 call. The third quarter has since ended, and Expedia has not yet reported its results.
Acquisitions are another use for the cash. On that call, management named acquisitions alongside returning cash to shareholders among its priorities, and in May it announced plans to buy CarTrawler, a B2B car rental platform. And the buyback has already slowed: Expedia repurchased $200 million of stock in the second quarter, out of $900 million for the first half of 2026.
Expedia’s free cash flow comfortably exceeds what it returns to shareholders, so a shortage of cash is unlikely to slow the buyback in 2026. But management could still choose to spend less on it. When Expedia reports its third quarter, another repurchase figure near $200 million would show it retiring shares far more slowly than over the past twelve months.
How To Act On EXPE?
Now you know EXPE better. And that’s our purpose: to make you informed before you invest your money. However, making a bet on a single stock carries its own risks.
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