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On Friday, Cantor Fitzgerald analyst Deepak Mathivanan adjusted the price target for Expedia Group Inc. (NASDAQ:EXPE) shares, raising it to $170 from the previous $150, while maintaining a Neutral rating on the stock. The revision follows Expedia’s first-quarter results, which showed bookings and revenue per night (RN) marginally missing analyst expectations by 1%, attributed to weaker demand in the U.S. However, the company’s EBITDA exceeded forecasts by 10%. According to InvestingPro data, Expedia maintains impressive gross profit margins of 89.54% and currently appears undervalued based on its Fair Value analysis. The company’s financial health score stands at "GREAT," supported by strong profitability metrics.
Expedia has updated its second-quarter 2025 bookings growth outlook to 2-4%, a decrease from the prior estimate of 5% by analysts. The full-year 2025 expectations for bookings and revenues have also been revised to the same range of 2-4%. Despite the lower top-line growth projections, Expedia anticipates improved margins, now expecting an increase of 75-100 basis points, up from the earlier 50 basis points. This improvement is credited to cost control measures implemented in the first quarter. InvestingPro analysis reveals the company trades at an attractive PEG ratio of 0.34, suggesting good value relative to its growth prospects. Subscribers can access 10+ additional ProTips and comprehensive financial metrics in the Pro Research Report.
Mathivanan notes that while the core U.S. market’s weak demand is impacting Expedia’s revenue growth for 2025, the company’s recent cost-saving actions have led to an upward revision of the fiscal year 2026 EBITDA forecast by 6%. Nonetheless, the analyst anticipates that demand volatility will continue in the short to medium term until macroeconomic conditions in the U.S. stabilize. The company’s EBITDA stands at $1.84 billion for the last twelve months, with a strong free cash flow yield of 12%.
In his commentary, Mathivanan stated, "As expected, weak demand in the core U.S. market is weighing on EXPE’s topline growth in 2025. Admittedly, we expect demand volatility to persist over the next few months until macro conditions stabilize in the U.S." He also added, "We have revised our FY26E EBITDA higher by 6%, reflecting the recent cost actions, but continue to expect soft top-line trends in the near-medium term. We reiterate our Neutral rating and our revised PT is now $170 (vs. $150 previously)."
In other recent news, Expedia Group Inc. reported its first-quarter 2025 earnings, revealing an earnings per share (EPS) of $0.40, which surpassed the forecast of $0.37. However, the company’s revenue of $2.99 billion did not meet the anticipated $3.02 billion. Analysts from several firms have adjusted their outlooks following these results. Piper Sandler downgraded Expedia’s stock rating from Neutral to Underweight, reducing the price target to $135 from $174, citing concerns over U.S. travel demand and business-to-consumer sector performance.
Similarly, Citi analyst Jason Bazinet lowered the price target to $177 from $217, maintaining a Neutral rating, while highlighting a slowdown in U.S. travel demand. TD Cowen also reduced the price target to $170 from $180, noting a modest shortfall in top-line growth. Goldman Sachs analyst Eric Sheridan cut the price target from $6.00 to $5.00, maintaining a Neutral rating, reflecting a cautious approach to the company’s stock performance.
Despite these challenges, Expedia’s business-to-business segment showed strong growth, with gross bookings increasing by 14% year-over-year. Advertising revenue also grew by 20% year-over-year. The company aims to expand its full-year EBITDA margin by 75 to 100 basis points, despite ongoing macroeconomic uncertainties.
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