By Carly Forster
Expedia Inc (NASDAQ:EXPE) a Bellevue, Washington based online travel agency that provides information about flights, hotels, car rentals, cruises, etc. One can then book and purchase his/her trip for either business or leisure. The travel company released its latest quarterly earnings report on July 31st and its results certainly got shareholders excited. As a result, shares of Expedia rose almost 6% the day its quarterly earnings report was released.
During its Q2 earnings results, Expedia Inc (NASDAQ:EXPE) reported $1.03 earnings per share, beating analysts’ consensus estimate of $0.76 by $0.27. During the same quarter last year, the company posted $0.64 earnings per share. Expedia had revenue of $1.49 billion for the quarter, compared to analysts’ consensus estimate of $1.44 billion. The website’s quarterly proceeds were up 24.0% on a year-over-year basis. On average, analysts’ expect that Expedia will post $3.96 earnings per share for the current fiscal year.
Many are speculating that the reason for Expedia’s increase in momentum is due to its Expedia Traveler Preference program, which launched at the end of 2012. The company’s ETP program allows customers to either pay when they book their reservation or pay once their trip is completed. Another reason for Expedia’s impressive numbers is due to the implementation of its partnership with once rival, Travelocity, an agreement inked last year. The two travel websites made a deal that Expedia would maintain content, inventory, customer service and technology while Travelocity would implement brand marketing in the United States and Canada.
Shares of Expedia opened at $84.49 on Tuesday, August 4th. The website has a 1-year high of $85.70 and a 1-year low of $45.69. The stock’s daily moving average is $84.69 and has a 50-day moving average of $79.23. The market cap for Expedia is $10.82 billion and its P/E ratio is 36.39.
On August 1st of this year, Raymond James analyst Aaron Kessler upgraded Expedia from Market Perform to Outperform with a $100 price target. He reasoned, “1) Expedia Inc (NASDAQ:EXPE) continues to experience solid room night growth (~23% normalized in 2Q); 2) we believe operating margins should begin to expand given Expedia is past its investment cycle and should see leverage across COGS, technology, and G&A; 3) we believe increasing focus on adding more hotel supply and geographic expansion should drive solid long-term revenue growth; 4) we believe valuation is attractive at 17x 2015 non-GAAP EPS vs. ~mid-teens LT EPS growth.” Kessler has a +22.2% average return on all stocks and a 68% success rate in making recommendations. He also has 0.8% average return on Expedia stock and is ranked 36 out of 3203 on TipRanks.
Separately on August 1st, Credit Suisse analyst Dean Prissman reiterated a Neutral rating for Expedia but raised his price target from $78 to $85. He noted, “While we remain on the sidelines given continued concerns that competitive pressures from Booking’s US entry are still to come and that the effect of Hotwire’s challenges could be amplified in seasonally larger quarters, we were encouraged to see the strong room night growth, which in part puts to rest some uncertainty that tough comps from platform enhancements will have a negative impact.” Prissman has a +5.2% average return on all stocks and a 67% success rate in making recommendations.
Although both analysts agree Expedia Inc (NASDAQ:EXPE) should be in their portfolio, one believes having more shares will lead to more profit, while the other believes letting the stock sit is the right way to go. Who would you trust?
To see all recommendations for Expedia, visit TipRanks today!
Carly Forster writes about stock market news. She can be reached at [email protected]