How I Made $5000 in the Stock Market

Expedia Stock Has Been a Trip. The Good Times Aren’t Over.

Sep 30, 2025 10:00:00 -0400 by Teresa Rivas | #Follow-Up

Expedia has outperformed the S&P 500 but catalysts for more upside remain.

Expedia stock has been flying high since Barron’s picked it in October 2024. (Tiffany Hagler-Geard/Bloomberg)

Key Points

Summer vacation is over. Expedia should keep flying high.

Shares of the online travel agent, or OTA, have soared more than 45% since Barron’s recommended them in October, outperforming the S&P 500 by almost a third. Yet catalysts for more upside remain: Vacation spending is still a priority for plenty of consumers, which has led to strong quarterly results and the expectation for ongoing double-digit earnings growth. Nor does the stock look particularly pricey.

Expedia reported a beat-and-raise second quarter in August, its ninth consecutive quarter of producing earnings per share ahead of consensus expectations. Its advertising business jumped 22% year over year, far outpacing its core travel segment, and the company now expects full-year revenue growth of 3% to 5% for the year, up from an earlier range of 2% to 4%.

Moreover, there were signs the company is continuing to progress in its efforts to catch up with industry leader Booking. Expedia management said it believes it took market share from the Priceline owner in both the hotel and airfare categories, despite a tougher industry backdrop.

The upshot is that Expedia offers the “most torque to [an] improving U.S. travel environment,” says Oppenheimer analyst Jed Kelly, who raised his price target to $250 after the earnings report.

It wasn’t a perfect quarter: The company said that lower- and middle-income consumers have unsurprisingly become more cautious about vacation plans, while travel trends in general were muted amid ongoing economic uncertainty. Its Hotels.com and vacation rental VRBO brands continued to see softness, and the stock isn’t a favorite on Wall Street, with fewer than 40% of analysts tracked by FactSet bullish on the shares.

Expedia still saw a noticeable uptick in demand early in the third quarter, and its business-to-business segment jumped double digits—a feather in the cap of its relatively new chief executive officer Ariane Gorin, writes Bank of America analyst Justin Post: “With airlines and hotels suggesting further improvement potential in the fall shoulder season, we like the stock set up.”

Profit might be cooling from the white-hot revenge-travel levels in the postpandemic period, but consensus still calls for Expedia’s EPS to jump by 17.7% this year and 18.7% next year.

Investors can buy the shares without dipping too far into their vacation fund: The stock changes hands for just over 13 times next year’s earnings, compared with its five-year average of nearly 18 times and multiples of more than 20 times for rivals.

“With Expedia trading well below levels seen by Airbnb and Booking, we see a low risk, high reward dynamic,” says Gordon Haskett analyst Robert Mollins, whose $265 per share price target implies upside of about 20%. Mollins cites the improvement in traffic (and converting visits to bookings), the less seasonal nature of B2B travel, and the fact that the current share repurchase plan is equivalent to roughly 10% of the company’s market capitalization.

There’s evidence to suggest that travel demand will remain higher than it was prepandemic, and from vacation packages to local excursions, OTAs are grabbing more vacation spending.

Expedia has been reliably expanding its already cushy gross margins in recent years too—growth that could signal that it is a compounder, i.e. a company that can consistently reinvest in its business and outperform the broader market over time, according to Trivariate Research.

Everyone needs a change of scenery now and then, but there’s no need to unpack Expedia from your portfolio.