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On Wednesday, Cantor Fitzgerald’s analysts revised their price target for Expedia Group Inc. (NASDAQ:EXPE) shares, adjusting it down to $180 from the previous $190, while maintaining a Neutral rating on the stock. The adjustment comes ahead of the company’s anticipated fourth-quarter earnings report, which is scheduled for release on February 6, 2025. According to InvestingPro data, analyst targets for EXPE currently range from $148 to $236, with the stock trading at $171.77. InvestingPro analysis suggests the stock is currently undervalued relative to its Fair Value.
Expedia’s fourth-quarter performance is expected to be strong, mirroring the positive results seen across the travel industry. The company’s impressive 89.19% gross profit margin and strong financial health, as revealed by InvestingPro analysis, support this outlook. Key performance indicators (KPIs) are predicted to show notable outperformance. As the market looks ahead, the focus is likely to shift towards the company’s guidance for the first quarter of 2025. Analysts anticipate that the guidance will account for shifts in revenue and EBITDA timing.
The forthcoming earnings call is also expected to provide insights into Expedia’s full-year outlook for 2025, particularly any strategic commentary from the current Strategic Advisor or the new Chief Financial Officer. While Expedia’s business-to-business (B2B) segment is expected to maintain stable growth trends, the business-to-consumer (B2C) outlook remains uncertain, especially regarding growth improvement at VRBO amid stable investment levels.
Analysts predict that Expedia might present a preliminary outlook for 2025, suggesting a slight acceleration in bookings growth on an ex-foreign exchange basis. However, they also note that the company may face a more challenging path to achieving margin expansion.
Expedia’s stock performance has lagged behind the NASDAQ, trailing by 10 percentage points year-to-date, with InvestingPro data showing a -7.81% YTD return. Despite this, the stock trades at an attractive PEG ratio of 0.52, indicating potential value relative to its growth prospects. Analysts at Cantor Fitzgerald have chosen to uphold a Neutral rating on the stock until there is greater clarity on the growth trajectory of Expedia’s B2C brands in the upcoming fiscal year. For deeper insights into EXPE’s valuation and growth potential, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.
In other recent news, Booking Holdings (NASDAQ:BKNG) has seen a favorable turn of events as a federal court overturned a prior verdict that held the company accountable for violating a computer fraud law against Ryanair DAC. This decision has lifted a significant legal cloud that was hanging over the company. Meanwhile, Expedia Group Inc. has been upgraded from Neutral to Buy by BofA Securities. The firm also increased its price target for Expedia’s shares, citing early signs of improvement in U.S. travel trends and potential growth in EBITDA.
DA Davidson also adjusted its outlook on Expedia, raising the price target and maintaining a Neutral rating on the stock. This was following Expedia’s third-quarter results, which showed an increase in gross bookings and adjusted EBITDA, despite a slight miss on consolidated revenues. On the regulatory front, the Federal Trade Commission (FTC) has implemented a final Junk Fees Rule aimed at prohibiting deceptive pricing and hidden fees in the live-event ticketing and short-term lodging industries, which could impact companies like Booking Holdings and Expedia.
Booking Holdings’ Chief Financial Officer, Ewout Steenbergen, noted that American consumers are still delaying their vacation planning due to inflation, while European travelers are making travel arrangements earlier. Despite these patterns, Steenbergen remains optimistic about the future of the US travel market. These are some of the recent developments impacting these companies in the travel industry.
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