Expedia Stock Soars, Airbnb Rises After Earnings. Why There’s Hope for Travel.

Expedia forecast revenue growth of between 6% and 7% for the year, up from a previous guidance range of 3% to 5%. (Photograph by Andrew Harrer/Bloomberg)

Key Points

• Expedia’s shares rose 16% in premarket trading after exceeding third-quarter earnings and sales expectations.
• The company reported adjusted earnings of $7.57 per share on $4.4 billion in sales, an increase of 9% year-over-year.
• Expedia raised its full-year revenue growth forecast to 6% to 7% and gross bookings growth to 7%.

It’s looking sunny for Expedia shareholders with the stock surging after its earnings.

The online travel agency is coping well with worries about the economy and artificial-intelligence, according to Wall Street.

Expedia shares were up 17% at $26.17 in early trading on Friday. Earnings after the market close on Thursday were ahead of expectations. Importantly, the company said travel demand was strong—and not only for richer customers.

“Interestingly, Expedia spoke to resilient demand at the lower-end of travel. While our macro U.S. lodging data is suggestive of softer patterns as supported by many lodging company earnings this quarter, it is possible that some of Expedia’s gains are driven by share shift away from travel suppliers,” wrote Truist Securities analyst Gregory Miller in a research note.

Miller has a price target of $210 on Expedia stock and a Hold rating.

Expedia isn’t the only travel stock striking an upbeat note. Airbnb shares were up 0.5% after the short-term rental platform logged another quarter of growth and forecast fourth-quarter sales above expectations, saying travel demand strengthened in the third quarter and continued to do so in October.

Expedia stock is up around 46% since Barron’s recommended the shares in October last year, and we recently backed the stock to keep gaining due to higher levels of vacation spending and an inexpensive valuation.

That view has support on Wall Street. Melius Research analyst Connor Cunningham reiterated his Buy rating with a price target of $262 in a research note, noting the company has addressed worries about AI displacing travel agencies with partnerships with Google and OpenAI.

“The volatility around tariffs and trade has moderated, and the US market has improved. Expedia took advantage…well exceeding expectations across all major business units. Long term, the debate around the rise of AI and the potential change that brings with travel bookings will remain an overhang,” Cunningham wrote.

Expedia lifted its guidance after earnings, forecasting revenue growth in a range of 6% to 7% for the year, from a previous call of 3% to 5%. It called for an increase in gross bookings of 7% for the year, from an earlier outlook of between 3% and 5%.

The company reported third-quarter adjusted earnings of $7.57 a share on sales of $4.4 billion, up 9% on year. Analysts polled by FactSet expected adjusted earnings of $6.97 a share on sales of $4.3 billion.

Write to Adam Clark at adam.clark@barrons.com