Last Updated: 18 Sep 2024
Executive Summary
Expedia Group Inc. (EXPE) is a leading online travel shopping company with a strong global presence. The company's financial performance has been solid in recent quarters, with revenue and earnings growth driven by increased travel demand. Despite facing headwinds from the COVID-19 pandemic, Expedia has taken steps to strengthen its business and position itself for future growth. The stock is currently trading at a discount to its intrinsic value, making it an attractive investment opportunity for long-term investors.
Company Overview
Expedia Group is a global online travel company that offers a wide range of travel products and services, including flights, hotels, vacation rentals, car rentals, and activities. The company operates a portfolio of well-known brands, including Expedia.com, Vrbo, Hotels.com, Hotwire.com, Orbitz, Travelocity, trivago, and CarRentals.com. Expedia serves consumers and small businesses in over 200 countries and territories.
Fundamental Analysis
Expedia's financial performance has been solid in recent quarters. In the first quarter of 2023, the company reported revenue of $3.3 billion, an increase of 6% year-over-year. Net income for the quarter was $237 million, an increase of 10% year-over-year. The company's gross profit margin was 75.6%, an increase of 1.1 percentage points year-over-year.
Expedia's financial strength is supported by its strong cash flow generation. In the first quarter of 2023, the company generated $479 million in operating cash flow, an increase of 15% year-over-year. The company's free cash flow for the quarter was $339 million, an increase of 20% year-over-year.
Technical Analysis
Expedia's stock price has been trending higher in recent months. The stock is currently trading above its 50-day and 200-day moving averages, indicating a positive trend. The stock's relative strength index (RSI) is also above 50, indicating that the stock is not overbought.
Short Term Outlook
In the short term, Expedia's stock price is likely to continue to trade higher. The company's strong financial performance and positive technical indicators suggest that the stock is undervalued. However, investors should be aware of the risks associated with investing in the travel industry, which is cyclical and can be affected by economic downturns.
Long Term Outlook
In the long term, Expedia's stock price is likely to continue to grow. The company is well-positioned to benefit from the long-term growth of the online travel market. Expedia's strong brand recognition, global reach, and innovative technology platform give it a competitive advantage in the industry.
Analyst Recommendations
Analysts are generally positive on Expedia's stock. The consensus analyst rating for the stock is "Buy." The average analyst target price for the stock is $148.24, which represents a potential upside of 7% from the current price.
Conclusion
Expedia Group Inc. is a leading online travel company with a strong global presence. The company's financial performance has been solid in recent quarters, and its stock price is currently trading at a discount to its intrinsic value. Expedia is a good investment opportunity for long-term investors who are looking for exposure to the growing online travel market.
