Expedia logged a 5.3% change during today's morning session, and is now trading at a price of $158.87 per share.
Expedia returned gains of 57.7% last year, with its stock price reaching a high of $161.59 and a low of $92.48. Over the same period, the stock outperformed the S&P 500 index by 21.1%. More recently, the company's 50-day average price was $139.35. Expedia Group, Inc. operates as an online travel company in the United States and internationally. Based in Seattle, WA, the Large-Cap Consumer Discretionary company has 17,100 full time employees. Expedia has not offered a dividend during the last year.
The Company's Revenues Are Declining:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $11,223 | $12,067 | $5,199 | $8,598 | $11,667 | $12,839 |
| Operating Margins | 6% | 7% | -52% | 2% | 9% | 8% |
| Net Margins | 4% | 5% | -50% | 0% | 3% | 6% |
| Net Income (M) | $406 | $565 | -$2,612 | $12 | $352 | $797 |
| Net Interest Expense (M) | $190 | $173 | $360 | $351 | $277 | $245 |
| Depreciation & Amort. (M) | $676 | $712 | $739 | $715 | $704 | $748 |
| Diluted Shares (M) | 153 | 150 | 141 | 150 | 162 | 150 |
| Earnings Per Share | $2.65 | $3.77 | -$19.0 | -$1.8 | $2.17 | $5.31 |
| EPS Growth | n/a | 42.26% | -603.98% | 90.53% | 220.56% | 144.7% |
| Avg. Price | $117.88 | $122.28 | $92.82 | $162.56 | $161.69 | $158.52 |
| P/E Ratio | 43.5 | 31.84 | -4.89 | -90.31 | 72.18 | 28.82 |
| Free Cash Flow (M) | $1,097 | $1,607 | -$4,631 | $3,075 | $2,778 | $1,844 |
| CAPEX (M) | $878 | $1,160 | $797 | $673 | $662 | $846 |
| EV / EBITDA | 16.47 | 14.74 | -13.16 | 39.33 | 18.76 | 18.3 |
| Total Debt (M) | $7,434 | $9,127 | $16,432 | $16,165 | $12,480 | $12,506 |
| Net Debt / EBITDA | 3.59 | 3.6 | -6.6 | 13.38 | 4.69 | 4.65 |
| Current Ratio | 0.64 | 0.72 | 1.04 | 0.87 | 0.82 | 0.78 |
Expedia has generally positive cash flows, decent operating margins with a stable trend, and a strong EPS growth trend. However, Expedia has slight revenue growth and decreasing reinvestment in the business, not enough current assets to cover current liabilities because its current ratio is 0.78, and a highly leveraged balance sheet.
Expedia's Valuation Is in Line With Its Sector Averages:
Expedia has a trailing twelve month P/E ratio of 25.1, compared to an average of 22.6 for the Consumer Discretionary sector. Based on its EPS guidance of $14.37, the company has a forward P/E ratio of 9.7. According to the 27.3% compound average growth rate of Expedia's historical and projected earnings per share, the company's PEG ratio is 0.92. Taking the weighted average of the company's EPS CAGR and the broader market's 5-year projected EPS growth rate, we obtain a normalized growth rate of 16.0%. On this basis, the company's PEG ratio is 1.57. This suggests that these shares are overvalued. Furthermore, Expedia is likely overvalued compared to the book value of its equity, since its P/B ratio of 23.38 is higher than the sector average of 3.19. The company's shares are currently trading 354.8% below their Graham number. Ultimately, Expedia's strong cash flows, decent earnings multiple, and healthy debt levels factor towards it being fairly valued, its elevated P/B ratio notwithstanding.
There's an Analyst Consensus of Little Upside Potential for Expedia:
The 30 analysts following Expedia have set target prices ranging from $118.0 to $200.0 per share, for an average of $150.7 with a hold rating. The company is trading 5.4% away from its average target price, indicating that there is an analyst consensus of little upside potential.
Expedia has an average amount of shares sold short because 5.9% of the company's shares are sold short. Institutions own 98.6% of the company's shares, and the insider ownership rate stands at 0.89%, suggesting a small amount of insider investors. The largest shareholder is Vanguard Group Inc, whose 12% stake in the company is worth $2,436,247,068.
