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Investing.com - RBC Capital has raised its price target on Expedia (NASDAQ:EXPE) to $200.00 from $180.00 while maintaining a Sector Perform rating on the stock. The stock, currently trading at $195.72, has demonstrated impressive momentum with a 59.75% return over the past year.
The price target increase follows Expedia’s second-quarter results, which RBC noted were slightly better than Street estimates and "much better than feared" after less positive indicators from Airbnb and Booking (NASDAQ:BKNG) regarding U.S. travel demand. With six analysts recently revising earnings upward and the company maintaining robust gross profit margins of 89.5%, InvestingPro analysis suggests Expedia remains undervalued relative to its Fair Value.
RBC highlighted that Expedia’s room night growth was approximately in line with peers, suggesting improving execution for the online travel company.
The firm also pointed to Expedia’s B2B and advertising segments as providing "outsized and profitable growth," while noting the company’s margin story is "getting incrementally better with rising capital return."
Despite raising estimates and viewing Expedia’s valuation as "reasonably attractive at 14x ’26E EBITDA," RBC expressed caution about chasing the stock following its significant after-hours move, which the firm suggested was likely amplified by investor positioning.
In other recent news, Expedia reported impressive financial results for the second quarter of 2025, exceeding analysts’ expectations. The company achieved an earnings per share (EPS) of $4.24, surpassing the forecasted $3.96, while its revenue reached $3.79 billion, beating the anticipated $3.7 billion. Following these results, Piper Sandler raised its price target for Expedia from $135 to $190, although it maintained an Underweight rating on the stock. UBS also increased its price target for Expedia, moving it from $182 to $209, citing margin growth and maintaining a Neutral rating. The company’s strong performance was attributed to accelerated room nights growth and a 17% year-over-year increase in its B2B segment, particularly in Asia and Europe. Additionally, BofA Securities raised its price target from $211 to $240, maintaining a Buy rating. This adjustment reflects BofA’s higher estimates and improved top-line growth prospects. These developments highlight the positive momentum for Expedia in the market.
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