On Friday, Goldman Sachs adjusted its price target for Expedia Group Inc (NASDAQ:EXPE), increasing it to $208 from the previous $200, while maintaining a Buy rating on the shares. The firm's analyst cited Expedia's third-quarter earnings, highlighting the company's performance that surpassed Gross Bookings expectations and achieved slightly better than anticipated adjusted EBITDA, though revenue fell marginally short.
Expedia's management noted several key points in their commentary, including a second consecutive quarter of accelerated Gross Bookings in the B2C segment. Specifically, Brand Expedia saw a mid-teens percentage year-over-year increase in booked room nights, and Vrbo reported modest year-over-year growth in Gross Bookings for Q3, with a positive outlook for the fourth quarter.
Additionally, the performance in air travel and benefits from advertising initiatives partially offset the impact of previous pricing actions on revenue.
The analyst also pointed out that trends in Europe and the Rest of the World (RoW) were more favorable compared to the United States. The B2B sector was highlighted as a consistent area of growth for Expedia. Furthermore, the company's Chief Financial Officer (CFO) is set to step down, with the search for a successor underway.
Goldman Sachs expressed a positive view on Expedia's ability to return capital to shareholders, noting the company's $470 million share repurchases in the third quarter and the remaining $3.2 billion in its share buyback authorization. The firm has updated its operating estimates for Expedia to reflect the latest earnings results and management's comments.
In other recent news, Expedia Group, Inc. reported third-quarter earnings that exceeded analyst expectations, resulting in a surge in shares. The company's adjusted earnings per share for the quarter ending September 30, 2024, came in at $6.13, surpassing the estimated $6.05.
However, Expedia's revenue fell slightly short of expectations, coming in at $4.06 billion against the projected $4.11 billion. Despite this, the company's gross bookings showed a robust 7% YoY increase to $27.5 billion.
In addition to the earnings report, Expedia announced a change in its executive team, with CFO Julie Whalen set to step down. A successor is expected to be appointed before February 17, 2025. In terms of performance, the company's B2B segment showed strong growth, with gross bookings and revenue increasing by 19% and 18% respectively, to $1.2 billion.
These developments are part of a series of recent events that have seen the online travel company raise its full-year guidance, indicating confidence in its future performance. Expedia's room night growth also remained strong at 9% compared to the same period last year, with Brand Expedia growing in the mid-teens.
The company's CEO, Ariane Gorin, expressed satisfaction with the results, noting the acceleration in bookings growth in the consumer business and continued strong growth in the advertising and B2B businesses.
InvestingPro Insights
Expedia Group's recent performance aligns with several InvestingPro Tips and metrics. The company's impressive gross profit margin of 89.19% for the last twelve months as of Q3 2024 underscores its operational efficiency, supporting Goldman Sachs' positive outlook. Additionally, InvestingPro Tips highlight that management has been aggressively buying back shares, which is consistent with the $470 million share repurchases mentioned in the article and the remaining $3.2 billion authorization.
The company's strong financial position is further reflected in its market capitalization of $22.67 billion and a revenue of $13.39 billion for the last twelve months as of Q3 2024. Expedia's stock has shown significant momentum, with a 47.61% price return over the last three months, aligning with the analyst's increased price target.
For investors seeking a more comprehensive analysis, InvestingPro offers 13 additional tips for Expedia Group, providing deeper insights into the company's financial health and market position.
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