Expedia (NASDAQ: EXPE) stock has risen approximately 33% since the start of 2024, surpassing the S&P 500, which has gained 27% during the same timeframe. In contrast, competitor Tripadvisor (NASDAQ: TRIP) has declined by 18%. What’s driving Expedia’s strong performance? Separately, with earnings close at hand, see How Grand Canyon Education Stock Might React To Upcoming Earnings.
Key factors behind Expedia’s growth include a rebound in travel demand, particularly within the U.S. market, and a surge in international bookings, notably in the Asia-Pacific region. The company’s strategic expansion into the business-to-business (B2B) sector, now comprising 27% of total bookings, has been a significant contributor. Enhancements to its service offerings, such as the Vrbo platform, have further strengthened its market position. Additionally, reinstating its quarterly dividend at $0.40 per share has been well-received by investors, boosting the stock price. Expedia’s financial results for Q4 exceeded expectations, with strong revenue and earnings growth. Looking ahead, the company forecasts gross bookings and revenue growth of 4-6% for 2025, alongside an anticipated EBITDA margin improvement of 50 basis points. If you’re looking for a diversified investment approach, consider the High Quality portfolio, which has delivered more than 91% returns since inception, outperforming the S&P 500.
Expedia’s full-year 2024 revenue reached $13.7 billion, marking a 7% year-over-year (y-o-y) increase. The company’s total gross bookings also rose 7% y-o-y to $110.0 billion. Notably, B2B revenue surged 21% y-o-y to $4.1 billion, driven by strong corporate partnerships and increased business demand. In the business-to-consumer (B2C) segment, revenue saw modest growth to $9.3 billion. Brand Expedia reported a 9% increase in room nights, lodging revenue grew by 7%, and air travel revenue rose by 4% y-o-y. The company’s diluted earnings per share (EPS) increased by 69% to $8.95, while adjusted EPS rose 25% y-o-y to $12.11. EBITDA climbed 9% y-o-y to $3 billion for FY 2024.
EXPE stock has exhibited significant volatility over the past four years, with annual returns of 36% in 2021, -52% in 2022, 73% in 2023, and 23% in 2024. In contrast, the Trefis High Quality Portfolio, consisting of 30 carefully selected stocks, has been significantly less volatile while consistently outperforming the S&P 500. Why? These stocks tend to offer better risk-adjusted returns compared to the broader market, resulting in a smoother investment experience, as seen in the HQ Portfolio performance metrics.
We project Expedia’s revenue for the fiscal year 2025 to reach $14.5 billion, reflecting a 6% y-o-y increase. As a result of these updates to our earnings and revenue projections, we have revised Expedia’s valuation to approximately $205 per share, based on an expected GAAP EPS of $11.24 and a price-to-earnings (P/E) ratio of 18.2x for FY 2025, which is nearly aligned with the current market price as of February 14.
Expedia continues to benefit from the ongoing strength in global travel demand and improved profit margins across its B2B and B2C segments. The company remains focused on strategic technology investments and customer loyalty initiatives, including artificial intelligence integration. Additionally, Expedia is enhancing shareholder value through targeted share buybacks and its “One Key” loyalty program, which is boosting customer retention and repeat business. Separately, see What’s Driving Western Digital Stock’s 10% Surge?
For a comparative analysis, visit Expedia Peers to see how EXPE stock measures up against competitors. You can also explore other valuable comparisons across industries at Peer Comparisons.
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