Expedia Group's (EXPE) To Post Q4 Earnings: What's In Store?

Expedia Group, Inc. (NASDAQ:EXPE) is scheduled to report fourth-quarter 2019 results on Feb 13.

For fourth-quarter 2019, the Zacks Consensus Estimate for revenues is pegged at $2.76 billion, suggesting growth of 7.8% from the year-ago quarter.

Further, the consensus market for earnings per share is projected at $1.18 per share, indicating a decline of 4.8% from the prior-year quarter.

The company surpassed the Zacks Consensus Estimate in the trailing three quarters by 8.37%, on average.

In the third quarter, Expedia reported adjusted earnings of $3.38 per share, missing the Zacks Consensus Estimate by 11.5%. The figure also declined 7% on a year-over-year basis.

Revenues improved 9% year over year to $3.56 billion. However, the figure lagged the Zacks Consensus Estimate of $3.58 billion.

Let’s see how things are shaping up prior to this announcement.

Factors at Play

Expedia’s solid momentum across Core OTA, Vrbo and Egencia is likely to get reflected in the fourth-quarter results.

Core OTA: Expedia’s constant push toward targeted supply acquisition, resulting in an expanding core lodging portfolio, is likely to have aided the segment’s performance in the to-be-reported quarter. Further, product innovation and customer-centric approach are expected to have driven the segment’s stayed room nights in the quarter under review.

The Zacks Consensus Estimate for the segment’s revenues is currently pegged at $2.22 billion, indicating an improvement of 8.2% the year-ago reported figure.

Egencia: The company’s relevant local content, strengthening customer centric approach and rising hotel attach rates are likely to have accelerated the room night growth and bolstered the segment’s clientele in the fourth quarter.

The Zacks Consensus Estimate for the segment’s revenues is pegged at $162 million, suggesting growth of 4.5% from the prior-year quarter.

Vrbo: Increasing online bookable listings and stayed property nights are expected to have driven the segment’s top line in the to-be-reported quarter. Further, growing opportunities in the alternative accommodation space is expected to have benefited the segment in the fourth quarter.

The Zacks Consensus Estimate for revenues in Vrbo is pegged at $260 million, indicating growth of 13% from the year-ago quarter.

However, rising costs related to payment processing migration and brand marketing are likely to get reflected in the segment’s fourth-quarter performance.

trivago: Unfavorable changes in marketplaces and the company’s new advertiser features are expected to have hurt the segment’s performance in the quarter under review.

The Zacks Consensus Estimate for trivago’s revenues is pegged at $173 million, suggesting a decline of 8.9% from the year-ago reported figure.

Apart from these, softness in the local currency ADR environment and shift to expensive marketing channels are anticipated to have affected Expedia’s performance in the to-be-reported quarter.

What Our Model Says

Our proven model doesn’t conclusively predict an earnings beat for Expedia this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Expedia has an Earnings ESP of +8.82% and a Zacks Rank #4 (Sell).

Stocks to Consider

Here are a few stocks that you may consider, as our proven model shows that these have the right combination of elements to post an earnings beat this quarter.

Alteryx, Inc. (NYSE:AYX) has an Earnings ESP of +6.49% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Five9, Inc. (NASDAQ:FIVN) has an Earnings ESP of +1.02% and a Zacks Rank of 2.

Booking Holdings Inc. (NASDAQ:BKNG) has an Earnings ESP of +0.59% and a Zacks Rank #3.

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