Expedia’s Heavy U.S. Bet Exposes Vulnerability as Piper Sandler Downgrades

Piper Sandler has downgraded Expedia (EXPE) to “Underweight” from “Neutral,” citing concerns over the company’s heavy reliance on the U.S. travel market and weakening demand. The brokerage lowered its price target to $135 from $174, signaling a bearish outlook as Expedia grapples with headwinds in its core market.

The downgrade comes after Expedia reported mixed first-quarter results for 2025, with bookings and revenue growth missing estimates by 1%, despite EBITDA beating expectations. Analysts Thomas Champion and James Callahan highlighted that Expedia’s business-to-consumer (B2C) segment, which accounts for a significant portion of its business, grew just 1% year-over-year—a sharp deceleration from the 9% growth in the previous quarter.

Piper Sandler’s core concern is Expedia’s geographic concentration. The U.S. accounts for roughly 80% of Expedia’s revenue, leaving it disproportionately exposed to domestic demand trends. Recent data shows inbound travel to the U.S. fell 7% year-over-year, while travel from Canada—a key market—plummeted 30%, due to a combination of macroeconomic pressures and weaker consumer sentiment. These trends have already impacted Expedia’s performance, with its Hotels.com division struggling amid international forex headwinds and softer demand outside the U.S.

The brokerage also flagged Expedia’s revised full-year guidance, which now projects bookings growth of 2-4% (down from a prior 4-6% range) and revenue growth of 3-5% (down from 4-6%). Analysts warned that these cuts may not be the end of the story. “The compares get steadily more challenging,” they noted, referencing the sequential improvement in B2C growth during 2024 (from -3% in Q1 to 9% in Q4), which sets a high bar for 2025.

Piper Sandler’s skepticism hinges on Expedia’s lack of geographic diversification. Unlike rivals such as Booking Holdings, which have stronger international exposure, Expedia’s reliance on the U.S. leaves it vulnerable to domestic macroeconomic risks, including potential government spending cuts and a cooling labor market. With the Federal Reserve signaling a cautious stance on interest rate cuts, consumer spending on discretionary travel could remain constrained.

The brokerage’s price target cut underscores its belief that Expedia’s stock has further to fall. At the time of the downgrade, Expedia’s shares were trading near $140—still above Piper’s $135 target—and well below its 52-week high of $185. The analysts argued that the stock’s valuation no longer compensates for the risks tied to its U.S.-centric model, particularly as 30% of Expedia’s revenue comes from just three states (California, Texas, and Florida).

In conclusion, Expedia’s downgrade reflects a broader reckoning for companies overly reliant on the U.S. consumer. With 70% of U.S. households reporting reduced travel plans in 2025 and inbound demand still struggling, Expedia’s narrow geographic focus leaves it exposed to a slowdown that could last well into 2026. Piper Sandler’s price target implies a 23% downside from current levels, suggesting investors may need to brace for further volatility. Until Expedia diversifies its geographic footprint or the U.S. travel market rebounds meaningfully, its stock could remain under pressure.