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Investing.com - Goldman Sachs has raised its price target on Expedia (NASDAQ:EXPE) to $253.00 from $195.00 while maintaining a Buy rating following the company’s second-quarter 2025 earnings report. According to InvestingPro data, the company appears undervalued based on its Fair Value analysis, with analysts’ targets ranging from $135 to $290.
The travel company’s Q2 gross bookings and revenue slightly exceeded both Goldman Sachs and Wall Street estimates, with notable strength in the B2B segment and advertising revenue contribution. With impressive gross profit margins of 89.5% and annual revenue of $13.79 billion, Expedia also raised its 2025 adjusted EBITDA margin guidance after achieving approximately 150 basis points of year-to-date margin expansion. InvestingPro subscribers can access 10+ additional tips about Expedia’s financial health and growth prospects.
Goldman Sachs noted that Expedia’s management indicated previous cost-cutting measures did not fully impact Q2 results but are expected to further benefit the expense base in the second half of 2025, alongside anticipated B2C marketing leverage.
The company repurchased $627 million in shares during the quarter, approximately 50% higher than Goldman Sachs’ pre-quarter estimate, demonstrating Expedia’s commitment to shareholder returns with approximately $2.3 billion remaining on its stock buyback authorization. This aggressive share buyback program, highlighted as a key strength in InvestingPro’s analysis, is supported by the company’s strong free cash flow of $2.38 billion over the last twelve months.
Geographic performance showed stronger results in Asia, including contributions from the B2B segment, while management noted the U.S. market continues to experience pressure on inbound travel, shorter booking windows, and higher cancellation rates, though the upper end of the market shows greater resilience.
In other recent news, Expedia Group Inc. reported strong second-quarter earnings, surpassing analyst expectations. The company posted adjusted earnings of $4.24 per share, exceeding the anticipated $3.96 per share. Revenue for the quarter rose by 6% year-over-year to $3.79 billion, surpassing the consensus estimate of $3.7 billion. Expedia’s total gross bookings increased by 5% to $30.41 billion, with significant growth in its business-to-business segment, which saw a 17% rise in gross bookings. The business-to-consumer segment experienced a modest growth of 1%. Additionally, Expedia raised its full-year outlook, attributing the positive results to strong performance in its B2B segment and advertising revenue. These recent developments have drawn attention from investors and analysts alike.
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