Expedia (NASDAQ:EXPE), an online travel website, last released quarterly earnings on October 30th. Expedia reported a 29% year-over-year increase in bookings and a 22% year-over-year revenue increase, which the company attributed to growing strength in advertising and media revenue. Some speculate that Americans are travelling more thanks to low gas prices, proving beneficial for the company. Expedia also operates Hotels.com and hotwire.com; both travel websites as well.
Expedia forecasts that in 2015, Americans will travel to Dallas, Detroit, Denver, and Bangkok amongst other international and domestic cities. Expedia stated that travelers will have a higher demand for complimentary breakfast and free WiFi. Expedia is also anticipating that millennials are coming of age and will now be able to afford vacations. According to Expedia, millennials have a stronger desire to travel than previous generational demographics, and Expedia is ensuring that they attract this sector of potential consumers with appealing deals.
On December 29th, analyst Michael Olson of Piper Jaffray rated EXPE Neutral. Olson observed that the United States and Europe are continuing to produce favorable online travel data. However, Olson is wary of the fact that Expedia has been “aggressive” regarding its guidance, which could have negative consequences.
Olson has made 40 successful recommendations out of 82 total this year, earning a 49% overall success rate and a +5.2 average return per recommendation.
Separately on December 30th, analyst Jake Fuller of FBR Capital maintained an Outperform rating on Expedia with a price target of $100. Fuller observed that Expedia’s November earnings were healthy, but noted that it will be hard to maintain this momentum throughout the fourth quarter. Fuller said:
“While domestic bookings may be tracking in line to light for 4Q, it seems consensus has yet to pick up the mid-November acquisition of Wotif, which leaves us comfortable with a 23% global bookings growth target.”
Fuller has made 33 successful ratings out of 51 total this year, earning him a 65% overall success rate and a +13.2% average return per recommendation.
The top analyst consensus for Expedia on TipRanks is Moderate Buy.