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Expedia Stock Hits All-Time High on Strong 2Q15 Numbers

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Earnings overview

Expedia (EXPE) recorded very strong second quarter results, which led its stock price to new highs. The company reported a 15% year-over-year (or YoY) increase in revenues to $1.7 billion driven by a 20% YoY growth in gross booking. The revenue growth came as a result of a large number of acquisitions and strong core OTA (online travel agency) business, which included strong performance at Brand Expedia, Hotels.com, and Trivago.

On the domestic end, the company saw a 15% YoY growth in revenues, while international revenues rose by 14% YoY. Adjusted net income increased to $118.6 million, or $0.89 per share, compared to analyst estimates of $0.84 per share.

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Market reaction

Expedia declared its second quarter results on July 30, 2015, after the market hours. The positive earnings surprise led to the stock opening about 13% higher on Friday, July 31, 2015. The company’s stock has grown by about 16% in the past week and also touched its new all-time high at $123.75. The stock closed at $121.44 on Friday after a strong trading day.

On a year-to-date basis, the stock has returned about 41%, and its returns surpass 150% over the past two years. The strong quarterly performance has also helped the company earn better analyst ratings, and the market looks bullish about the company’s future prospects.

Company overview

Expedia (EXPE) is a Washington-based online travel company that offers travel products and services across its numerous online travel brands including Expedia.com, Hotels.com, Hotwire.com, Trivago, Egencia, Venere.com, Expedia Local Expert, Classic Vacations, and Expedia Cruise Ship Centers. The company provides various travel-related services such as price and product comparison, travel bookings, airline tickets, lodging, car rentals, and cruises directly to travelers via its full-service websites in 31 countries across the globe.

The company is a leader in the online travel segment and faces competition from other online travel companies such as Priceline Group (PCLN), Ctrip (CTRP), Orbitz (OWW), Travelzoo (TZOO), and Tripadvisor (TRIP). EXPE forms 0.52% of the Consumer Discretionary Select Sector SPDR (XLY).

We will look at the company’s quarterly results in detail in the next article.

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