Expedia's Travel Momentum Grows, But Analysts Await Clearer Signs Of Long-Term Upside

Expedia Group, Inc. (EXPE) has been on a roll in recent months, with its stock price surging and the company reporting strong earnings. However, analysts are still waiting for clearer signs of long-term growth potential. In this article, we will explore Expedia's recent performance, the factors driving its growth, and the analysts' perspectives on the company's future prospects.

Recent Performance and Growth Drivers

Expedia Group reported fourth-quarter 2024 earnings on February 6, 2025, beating Wall Street estimates on both the top and bottom lines. The company's revenue grew by 10% year-over-year (YoY) to $3.18 billion, while net income attributable to Expedia Group common stockholders surged 124% to $299 million. Adjusted EBITDA increased by 21% with 175 basis points of margin expansion, and adjusted EBIT grew by 50% with 282 bps of margin expansion.

The company's strong performance can be attributed to several factors, including:

1. Growing Travel Demand: The global travel industry has been recovering from the COVID-19 pandemic, and Expedia Group has benefited from the increasing demand for travel services.
2. Diversified Portfolio: Expedia Group's diverse portfolio of travel brands, including Expedia.com, Vrbo, Hotels.com, and trivago, caters to different customer segments and preferences, reducing the impact of competition from any single rival.
3. Strong U.S. Presence: The United States is a fundamental market for Expedia Group, with over 60% of its global earnings coming from the U.S. market. The company's strong brand awareness and market presence in the U.S. enable it to attract a significant number of customers and maintain its market share.



Analysts' Perspectives on Long-Term Growth Potential

While Expedia Group's recent performance has been impressive, analysts are still waiting for clearer signs of long-term growth potential. According to 30 analysts, the average rating for EXPE stock is "Buy," with a 12-month stock price forecast of $180.89, which is a decrease of -9.25% from the latest price. However, the consensus rating is "Buy," indicating that analysts remain optimistic about the company's prospects.

Some analysts, such as Tim Seymour of Seymour Asset Management, have expressed concerns about Expedia Group's ability to maintain its growth momentum. Seymour has noted that the company's stock price has been volatile, and he is waiting for more clarity on the company's long-term growth prospects before making a definitive call on the stock.

Other analysts, such as Ariane Gorin, CEO of Expedia Group, have expressed confidence in the company's long-term outlook and commitment to shareholder returns. In a recent earnings call, Gorin stated that the reinstatement of the company's quarterly dividend reflects its confidence in the long-term outlook and commitment to shareholder returns.

Conclusion

Expedia Group's recent performance has been impressive, with the company reporting strong earnings and benefiting from growing travel demand and a diversified portfolio of travel brands. However, analysts are still waiting for clearer signs of long-term growth potential. As the company continues to execute on its growth strategy and adapt to changing market conditions, investors will be watching closely for further developments in Expedia Group's long-term growth prospects.