Why Expedia Shares Tumbled

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Expedia (NASDAQ: EXPE  ) shares were falling flat today, dropping as much as 11% after cutting its guidance during its quarterly report.

So what: The travel-deals merchant said that revenue jumped 24% to $1.01 billion, mostly due to acquistions in Europe, and adjusted earnings were up to $0.25 a share during the travel company's weakest quarter. Both numbers topped the analyst consensus, which called for EPS of $0.23 a share, and sales at $966 million. But, Expedia conceded it was experiencing weakness on its Hotwire site, and cut its guidance as a result.

Now what: The travel-deal industry is a crowded field, and today's report from Expedia only seems to confirm the difficulty of standing out. While the strong revenue growth we saw in the quarter looks promising, there seems to be little competitive advantage or compelling reason to invest in Expedia, as shares aren't even particularly cheap at this point. Investors should be able to find better opportunities elsewhere.

Want more on Expedia? Add the company to your Watchlist by clicking right here.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2390572, ~/Articles/ArticleHandler.aspx, 8/27/2014 10:53:02 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement