Online booking platform Expedia (NASDAQ:EXPE) is gaining from the solid recovery in travel after the pandemic crushed the industry, leading to billions of dollars in losses. EXPE stock has advanced 12% over the past month and is up more than 23% year-to-date, thanks to the upbeat sentiment on travel. While some analysts are concerned about macro pressures, intense competition, and Expedia’s profitability, others seem optimistic about the company’s ability to grow further and win additional market share.
Pick the best stocks and maximize your portfolio:
- Discover top-rated stocks from highly ranked analysts with Analyst Top Stocks!
- Easily identify outperforming stocks and invest smarter with Top Smart Score Stocks
Analysts Seem Divided on Expedia
Expedia reported mixed results for the first quarter of 2023. The company’s revenue increased 18% year-over-year to $2.7 billion and surpassed expectations, with gross bookings up 20% to $29.4 billion. The company attributed its Q1 performance to rising international travel, solid travel trends in major cities, and the reopening of Asia. Moreover, Expedia experienced solid momentum in its B2B revenue, fueled by a growing partner base and a rise in the business from the existing partners.
While Q1 adjusted loss per share narrowed to $0.20 from $0.47 in the prior-year quarter, it was higher than analysts’ loss estimate. The company’s bottom line was impacted by continued investments in marketing and technology, including artificial intelligence (AI) and machine learning, to attract more customers to the platform and ensure continued growth.
Last week, B.Riley analyst Naved Khan initiated coverage of Expedia with a Buy rating and a price target of $160. Khan is optimistic about the company’s leading position in key markets, improved execution that helped retrieve U.S. market share, and strength in the B2B segment. Moreover, the analyst expects Expedia’s margins to expand due to cost leverage and marketing efficiencies.
In contrast, earlier this month, Wells Fargo analyst Ken Gawrelski initiated coverage of EXPE with a Sell rating and a price target of $93, saying that several data points indicate elevated competition in the online travel agency market.
On June 5, Wedbush analyst Scott Devitt initiated coverage of Expedia with a Hold rating and a price target of $116. Devitt noted that the company has yet to fully recover from the COVID-19 pandemic and is currently in a transitional phase, with the management focusing on higher lifetime value (LTV) customers while deemphasizing lower-margin geographies and brands.
Is Expedia a Good Stock to Invest in?
Wall Street seems divided on Expedia stock, with a Moderate Buy consensus rating based on 11 Buys, 13 Holds, and one Sell. The average price target of $124.57 implies 15.3% upside.
Investors looking for the most accurate and profitable analyst for EXPE could follow B. Riley’s Naved Khan. Copying the analyst’s trades on this stock and holding each position for one year could result in 65% of your transactions generating a profit, with an average return of nearly 18% per trade.
Conclusion
Wall Street has mixed reviews on Expedia due to macro concerns and competitive pressures. Resilient travel demand and the company’s investment in technology to compete with rivals and attract customers could drive growth in the upcoming quarters. Currently, the average price target indicates further upside in EXPE shares.
