Expedia Soars 4.38% on Earnings Surge: Can This Travel Giant Sustain Momentum?

Summary
• Expedia (EXPE) surges 4.38% intraday to $195.84, breaking its 52-week high of $213.00.
• Earnings beat: $4.24 adjusted EPS, $0.29 above estimates, with 6% revenue growth to $3.79B.
• International sales jump 13%, driving full-year guidance upgrade to 3%-5% growth.
• Options frenzy: 1740 contracts traded for the $195 call expiring 8/15, signaling bullish conviction.
Expedia’s stock is in a tailwind after a blockbuster Q2 report, with international demand and margin expansion fueling optimism. The travel sector remains fragmented, but EXPE’s strategic clarity and AI-driven efficiency could redefine its trajectory.

Earnings Beat and Guidance Hike Drive EXPE's Rally
Expedia’s 14% premarket surge and 4.38% intraday gain stem from a triple-barreled catalyst: (1) $4.24 adjusted EPS, $0.29 above estimates, (2) 6% revenue growth to $3.79B, and (3) a 3%-5% full-year guidance upgrade. CEO Ariane Gorin highlighted 13% international sales growth and 190-basis-point Q2 margin expansion, outpacing May guidance. The stock’s 52-week high retest at $213.00 and 93.7x dynamic P/E reflect investor confidence in sustained demand recovery and cost discipline.

Travel Sector Mixed as Expedia Outperforms Booking Holdings
While Expedia surges, sector peer Booking Holdings (BKNG) declines 0.72%, highlighting divergent investor sentiment. EXPE’s focus on AI-driven operations and margin expansion contrasts with BKNG’s recent struggles. The travel sector remains polarized: U.S. demand rebounds, but global uncertainties linger. Expedia’s 13% international sales growth versus BKNG’s flat U.S. performance underscores EXPE’s strategic edge in capturing cross-border travel recovery.

Options Playbook: Leverage 195 Call and 197.5 Call for Gamma-Driven Gains
• Technical Indicators:
- 200-day MA: 174.88 (below current price)
- RSI: 53.52 (neutral)
- MACD: 2.41 (bullish divergence)
- Bollinger Bands: Price at 195.84 (above middle band 184.20)
• Trading Setup: Key support at 187.61 (previous close) and resistance at 213.00 (52W high). Short-term bullish bias with 5.7% upside to 207.00. No leveraged ETF data available, but options liquidity is robust.
• Top Options:
- EXPE20250815C195:
- Call, $195 strike, 8/15 expiry
- IV: 35.53% (moderate)
- Delta: 0.594 (moderate sensitivity)
- Theta: -0.7796 (high time decay)
- Gamma: 0.0374 (high sensitivity to price moves)
- Turnover: 888,803 (liquid)
- Why: High gamma and liquidity make this ideal for a 5% upside scenario (target $205.63).
- EXPE20250815C197.5:
- Call, $197.5 strike, 8/15 expiry
- IV: 28.77% (low)
- Delta: 0.494 (moderate sensitivity)
- Theta: -0.6548 (high time decay)
- Gamma: 0.0475 (high sensitivity)
- Turnover: 94,150 (liquid)
- Why: Lower IV and higher gamma offer asymmetric payoff if price breaks above 197.50.
Action: Aggressive bulls may consider EXPE20250815C195 into a breakout above $197.50.

Backtest Expedia Stock Performance
The backtest of Expedia (EXPE) after an intraday increase of 4% shows favorable short-to-medium-term performance. The 3-Day win rate is 53.45%, the 10-Day win rate is 55.86%, and the 30-Day win rate is 61.00%, indicating a higher probability of positive returns in the immediate aftermath of the surge. The maximum return during the backtest period was 4.98%, which occurred on day 58 after the surge, suggesting that EXPE can continue to perform well in the days following a significant intraday gain.

Expedia’s Rally: A New Benchmark for Travel Sector Optimism
Expedia’s earnings-driven surge reflects a strategic inflection point, with AI-driven efficiency and international demand recovery as tailwinds. While the 52-week high at $213.00 remains a critical psychological barrier, the stock’s 93.7x P/E and 35.5% IV suggest elevated expectations. Sector leader Booking Holdings (BKNG -0.72%) lags, underscoring EXPE’s momentum. Investors should monitor the 187.61 support level and 200-day MA at 174.88. A sustained close above $200 would validate the bullish case, making the 8/15 $195 call a high-conviction play.