Expedia Group Inc
Expedia Group Inc
IBD Stock Analysis
- Stock in an aggressive buy zone as it bounces off 10-week line
- Officially in consolidation, but could be in flat base by week’s end
- Official buy point out of consolidation is 188.03; goes to 197.43
Industry Group Ranking
* Not real-time data. All data shown was captured at
2:20PM EDT on
Expedia stock went into free fall in March 2020 as the pandemic kicked into high gear, spurring one of the toughest years the travel industry has ever faced.
Travel spending plunged 42%, or $500 billion, from 2019 to 2020, according to the U.S. Travel Association. International travel plummeted 76%, while business travel fell 70%, it said.
Now, portions of the travel industry are coming back after getting slammed for most of the past year. IBD’s travel booking group, for instance, has jumped to No. 32 among 197 industry groups, from No. 90 six weeks ago.
Positive Signals For Expedia Stock
And Expedia stock, since hitting an eight-year low in 2020, is up a whopping 264% since then.
Expedia could be considered in an aggressive buy zone as it is bouncing off its 10-week line. Officially, Expedia stock is in a consolidation phase with an official buy point of 188.03. The buy zone extends to 197.43, after which it would be extended. But Expedia’s chart pattern could turn into a flat base by the time the week is over.
A stock is considered to be extended when its 5% above the proper entry point. It’s a technical term used to describe the point at which a stock is up in price over its pivot or buy point and is considered riskier to buy.
Heavy Damage From Pandemic
Despite the brighter outlook, the damage inflicted on Expedia is clear to see by its revenue and earnings performance. Adjusted earnings plunged by triple digits from year-ago periods over the past four quarters. Revenue dropped by double digits during each of those periods.
The trend is expected to continue when the company reports first-quarter results on May 6. Analysts predict an adjusted loss of $2.32 a share, vs. a loss of $1.83 a year ago. They look for revenue to plunge 50% to $1.1 billion, according to FactSet.
However, they see a recovery starting in the second quarter. While analysts expect a 62-cent loss, that’s an improvement from a loss of $4.09 for the same quarter in 2020. In addition, they look for revenue to leap more than 200% to $1.7 billion.
By 2022, Expedia is expected to be solidly profitable, with earnings of $6.09 on revenue of $10.5 billion.
Heavy Competition In Travel
Travel is an increasingly competitive market with multiple companies in on the action. In addition to Expedia, there’s Booking Holdings (BKNG), Sabre (SABR), Airbnb (ABNB), Trivago (TRVG) and TripAdvisor (TRIP).
The IBD Stock Checkup tool shows that Expedia currently has a weak IBD Composite Rating of 41. The rating means Expedia stock currently outperforms 41% of all stocks in terms of the most important fundamental and technical stock-picking criteria. The stock also has a Relative Strength Rating of 91. The rating tracks market leadership by showing how a stock’s price movement over the last 52 weeks measures up against that of other stocks.
You’ll also find alerts to warning signs and sell signals that show when to take your profits or cut short any losses. You’ll also discover if the current stock market trend is conducive to buying stocks, or if it’s an environment where you want to take defensive action and sell.
Please follow Brian Deagon on Twitter at @IBD_BDeagon for more on tech stocks, analysis and financial markets.
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