Travel planners and facilitating company, Expedia (EXPE, Financial) saw its stock go up 7.31% to hit $101.12. After recording a loss in the same period last year, Expedia reported a first quarter net income of $44.1million. Expedia Inc. reported first quarter profit that exceeded analysts’ predictions. Over 2.7 million shares of Expedia were traded on Friday. The company only recently fell behind the Priceline Group Inc. (PCLN, Financial) to become the world’s second-biggest travel bookings company.
Investors should note Expedia Inc. traded at $94.23 post a move down the charts of -2.11% for the trading day. Expedia traded with a 12 month P/E multiple of 31.41. Expedia stock’s has an expected 5 year annual growth of 16.03% as well as a PEG multiple of 1.96.
After issuing its quarterly earnings data on Thursday, Expedia reported an EPS of 3 cents for the last quarter. The company’s revenue for the quarter was $1.37 billion compared to what the estimate predicted to be $1.35 billion. Expedia’s quarterly revenue touched 14.4% on a Y-o-Y basis. Analysts are predicting an EPS of $3.90 for the 2015 fiscal year.
Expedia has a 52-week low and high of $67.39 and $102.56, respectively.
Management words
According to Dara Khosrowshahi, president and CEO, Expedia is off to a strong start in 2015. He said that “We continue to be confident in our ability to deliver another year of solid results in a healthy travel environment. Aside from the worsening impact of FX translation on our results, our expectations for what we can deliver this year haven't changed. I'm particularly happy with our unit growth this quarter –Â global room nights up 32%, air tickets up 18%, and car rental days up over 35%. All representing shared gains in the overall travel market. The major brands in our core OTA segment are executing well and delivering good results. Revenue growth in the first quarter was driven by organic growth at Brand Expedia, Hotels.com, and EAN, as well as nice contributions from Travelocity and Wotif.”
Company profile
Along with its many subsidiaries, Expedia operates as a travel company based mainly online in the United States as well as globally. Established in 1996, Expedia is headquartered in Bellevue, Washington and has two operational segments are called Leisure and Egencia; these provide products relating to travel and travel services to both corporate as well as leisure flyers. They also focus on offline retail travel agents and travel service providers via their arsenal of brands such as expedia.com, hotels.com, Travelocity.com and Classic Vacations to name a few. Expedia specializes in the facilitation of hotel room bookings, booking of airplane seats, car rentals as well as destination services from travel suppliers. Expedia also acts as an agent for the transaction while sharing reservations booked by travellers to the relevant travel providers.
Analysis
Analysts have given Expedia Inc. a BUY rating. This is based on observation of the company’s strengths versus its weaknesses and the strength of the stock itself. Expedia’s strengths lie in various sectors such as its solid stock price performance, impressive record of a positive EPS, good growth in net income, growth in revenue as well as a sizeable return on equity. These strengths should most definitely outweigh the company’s high debt management risk.
