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On Monday, DA Davidson analyst Tom White increased the price target on Expedia Group Inc (NASDAQ:EXPE) to $205 from the previous $190, while retaining a Neutral stance on the stock. The adjustment comes as a response to Expedia’s performance in the fourth quarter of 2024, which saw significant growth across several segments of the company’s business. Currently trading at $204.98, the stock has delivered an impressive 54.35% return over the past year and is approaching its 52-week high of $205.12. According to InvestingPro analysis, the stock appears to be trading near its Fair Value.
Expedia’s fourth-quarter results surpassed expectations with a robust 9% year-over-year growth in its Business-to-Consumer (B2C) operations, marking a 5-point acceleration from previous figures. The company’s Business-to-Business (B2B) segment also reported a notable 24% year-over-year increase, complemented by a 25% rise in Advertising revenues. With an impressive gross profit margin of 89.46% and a market capitalization of $26.51 billion, Expedia demonstrates strong operational efficiency.
The travel platform’s Gross Bookings (GBs) for the quarter were 5% higher than the consensus, achieving a 13% growth rate, which outperformed the company’s own guidance of 6-8%. Additionally, Expedia’s revenues for the quarter exceeded forecasts by approximately 4%, with a 10% increase that also exceeded the anticipated 5-7% range. InvestingPro subscribers can access 14 additional key insights about Expedia’s financial health and market position, along with comprehensive Pro Research Reports that transform complex Wall Street data into actionable intelligence.
The fourth quarter’s adjusted EBITDA for Expedia reached $643 million, which not only surpassed the $571 million consensus but also exceeded DA Davidson’s estimate of $563 million. This financial outcome showcases Expedia’s capacity to generate earnings above both market and analyst expectations.
The revised price target of $205 is based on an 8.5x multiple of DA Davidson’s 2025 Enterprise Value/EBITDA (EV/EBITDA) projection for Expedia. This valuation reflects the firm’s recognition of Expedia’s solid quarterly performance and its potential for sustained growth in the near term.
In other recent news, Expedia Group Inc has seen a series of price target increases by several analyst firms based on their recent financial performance and strategic initiatives. Mizuho (NYSE:MFG) Securities raised its price target from $180 to $195, citing an increase in confidence in Expedia’s EBITDA forecast for fiscal year 2026, and highlighting room night growth and the success of the One-Key initiative. BMO Capital Markets also increased its price target from $165 to $190, reflecting anticipated improvements in EBITDA due to ongoing cost efficiencies.
TD Cowen lifted its price target for Expedia from $176 to $215, following a strong fourth-quarter performance, while Benchmark analysts increased their price target from $200 to $225, applauding the reinstatement of the company’s dividend and ongoing stock buyback program. Cantor Fitzgerald also raised its price target from $180 to $210, noting the company’s robust fourth-quarter results and potential for outperformance if it achieves its 2025 targets.
Despite these positive developments, all the analyst firms maintained their current ratings on the stock, indicating a cautious optimism for Expedia’s future performance based on its current trajectory and market positioning. These recent developments reflect growing confidence in Expedia’s financial health and strategic direction.
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