Expedia's (EXPE) Q1 Earnings May Reflect Core OTA Weakness

Expedia, Inc. (NASDAQ:EXPE) is set to report first-quarter 2018 results on Apr 26, after market close. Last quarter, the company reported a negative earnings surprise of 27.6%.

The surprise history has not been impressive in Expedia’s case. The company missed estimates in each of the trailing four quarters, with an average four-quarter negative surprise of 15.6%.

We observe that shares of Expedia have lost 17.7% in the past 12 months, significantly underperforming the industry’s 48.5% rally.

Core OTA

In the fourth quarter, this segment’s revenues decreased 19.7% sequentially but increased 9.6% year over year to $1.86 billion. The slower-than-expected room night growth could hurt this segment. The Zacks Consensus Estimate for this segment’s revenues is currently pegged at $1.88 billion.

Trivago

Trivago revenues decreased 36.4% year over year to $215 million. However, for the soon-to-be-reported quarter, the company expects to witness solid momentum in room-night growth in all key regions. The Zacks Consensus Estimate for this segment’s revenues is pegged at 300 million.

HomeAway

In the fourth quarter, HomeAway increased 16.3% from the year-ago quarter but declined 36.7% sequentially to $193 million. HomeAway room nights stayed rose 30% from the prior-year quarter. HomeAway conversion rates are strong and have been increasing year over year. Consistent increase in stayed room night and property night could slightly contribute to HomeAway’s growth. The Zacks Consensus Estimate for this segment’s revenues is pegged at $241 million.

Egencia

In the fourth quarter, Egencia increased 8.7% on a sequential basis and 18.1% on a year-over-year basis to $137 million. It is expected to perform well in the to-be-reported quarter driven by the ramp up of Egencia's sales force and increased client acquisitions. The Zacks Consensus Estimate for this segment’s revenues is pegged at $141 million.

What Our Model Says

Expedia has a Zacks Rank #3 (Hold) and an Earnings ESP of -20.48%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 has a good chance of beating estimates if it also has a positive Earnings ESP. Sell-rated stocks (Zacks Rank #4 or 5) are best avoided especially if they have a negative Earnings ESP.

Expedia, Inc. Price and EPS Surprise

Expedia, Inc. Price and EPS Surprise | Expedia, Inc. Quote

Stocks to Consider

Here are some stocks that you may consider as our model shows these have the right combination of elements to deliver a positive earnings surprise:

Western Digital (NASDAQ:WDC) has an Earnings ESP of +2.30% and a Zacks Rank #1.

Paycom Software (NYSE:PAYC) has an Earnings ESP of +0.33% and sports a Zacks Rank #1.

Agilent Technologies (NYSE:A) ) has an Earnings ESP of +3.72% and a ZacksRank #2.You can see the complete list of today’s Zacks #1 Rank stocks here.

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