Expedia Group ($EXPE) - Good Price & Good Travel Company ?
My afterthoughts to Tiger_chat 's question of whether an investor profits from a good company or a good price ?
"Why not both" I asked myself ?
Wouldn't there be more upsides comparatively speaking ?
Having put the theory to test on different company types (see below for details); time to try it on Travel Service stock; that I have always been curious.
Putting $Expedia(EXPE)$ to the test & see if it still fits the bill.
Sidetrack: Below are stocks that I have covered. Interested ? Click to read.
Please "Like" to show some love okie ? Thanks !
An American online travel shopping company for consumer and small business travel
Founded in Oct 1996 as a division of Microsoft
In 1999, it was spun off into a publicly company at US$14 per share
In 2001, USA Networks Inc bought a controlling interest in Expedia for an estimated $1.5 billion
In 2003, it was fully purchased by USA Networks Inc and became part of IAC Travel
In Aug 2005, IAC spun off Expedia Inc. that owned a host of travel group of businesses that included (1) Expedia, (2) Expedia Corporate Travel (now Egencia), (3) TripAdvisor, (4) Classic Vacations, (5) eLong, (6) Hotels.com, and (7) Hotwire.com
In 2011, Travel Smart Vacations travel company (Mexico) was acquired by Expedia
On 21 Dec 2012, Expedia bought a majority stake in travel metasearch engine Trivago
Between 2013 and 2020, Expedia continues to grow thru strategic acquisitions of various travel companies and divestment of companies within its holdings.
In 2022, a year where US market had been hammered by extreme volatility and ease of covid pandemic restrictions - how did Travel company - Expedia Group fare ?
Expedia Group - Summary
Revenue came in at $2.62 Billion vs $2.28 Billion (Q4 2021); that’s a +14.91% gain.
Net Income (GAAP) came in at $177 Million vs $276 Million (Q4 2021); that’s a -35.87% decline.
Earnings per share (GAAP) was $1.11 vs $1.70 (Q4 2021); that’s a -34.71% decline.
Earnings per share (Adjusted) was $1.26 vs $1.06 (Q4 2021); that’s a +18.87% gain.
Expedia Group - Segment revenue and Growth
Bulk of Expedia Group’s revenue is from its hotel retail bookings. It makes up about 70.6% and in Q4 2022, grew a respectable +8%.
Next up is its B2B (business to business) ventures, contributing 25.5% to total revenue and saw its biggest growth at +41%.
Thirdly, its search engine Trivago round off its revenue-contribution at 4.0% and managed to grow +7% for last quarter of 2022.
With its holding of companies that serves US market predominantly, its little wonder that US market reaped Expedia $1.72 Billion with international market’s contribution of $901 Million.
Expedia Group - Gross booking details
Like any “new wave” businesses (eg. Uber, Paypal, etc..) that provides the “bridging service” between demand (customers) and supply (merchants), its still volume of “room reservations, air ticket or both” that influenced Expedia’s top line and bottom line.
Merchant still brings in more businesses (revenue); tallying up to $11.04 Billion over a growth of +21% for Q4 2022.
Agency had brought in more business (+14%) last quarter, totalling up to $9.47 Billion.
Expedia Group - Other highlights
With covid restrictions easing “worldwide”; the urge to travel has never been more fuelled than now.
As travelling has picked up steadily from H2 2022; It has seen a healthy growth of +19% in the number of “booked room” nights.
Its “Air Travel revenue growth” of +44% (stunning results) is evident that people will need hotel accommodations
Expedia Group's Interim CEO on Q4 2022 Results
“We were pleased that we were able to deliver our most profitable year in 2022, despite the friction from transforming our business model and technology platform. While our Q4 results were negatively impacted by severe weather, demand was otherwise strong and accelerating, and has been markedly stronger since the start of the year”. "We begin ‘2023 with record app usage & member counts, led by Expedia US, the first of our brands to deploy new capabilities and marketing strategies. This year, we are excited to see these benefits accrue to more of our brands and geographies, driving further growth and margin expansion." ….said Expedia Group, Vice Chairman & CEO, Peter Kern….
Is Expedia Group - A Good Price Or A Good Company Or Both ?
Expedia Group - market analysts forecs
Above is a summary of Wall Street analysts’ view of the online travelling platform company
Of the 8 criteria (boxes); only 2 are in Red with the remaining 5 in Green & 1 neutral.
Overall, it is worth a “Hold” now with a +28.5% upside positivity; that is good news.
Investors should feel comfortable knowing that EXPE is likely to see a a stronger improvement to its earnings for 2023 when all covid restrictions are being taken down quickly; encouraging travel again
EXPE has a PEG ratio of 0.84.
“PEG” (Price/Earnings to Growth ratio) is similar to the commonly-used P/E ratio, but also factor a company's expected earnings growth rate
Do you think the Travel Industry as a whole will “recover” in 2023 regardless whether there will be mild recession experienced in the US ?
After having been cooped up for the past 2 years and with all borders’ restrictions coming down, do you think you will make your first trip abroad for holiday if you have not already done so ?
Please “LIKe” this post ok. Thanks. Your rating is very important to me !!
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
@Fangkoh