Why Expedia Shares Took Off

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: Shares of online travel company Expedia (NASDAQ: EXPE  ) soared 19% today after its quarterly results and outlook impressed Wall Street.

So what: The stock sank in July after a disappointing Q2, but today's Q3 results -- adjusted EPS of $1.43 beat the consensus by $0.08, while revenue jumped 17% -- coupled with an upbeat view, suggests that Expedia's recent lead-conversion issues are behind it. In fact, gross bookings increased 15% over the year-ago period, giving investors plenty of good vibes over its growth prospects going forward.

Now what: Management remains on course to deliver full-year adjusted EBITDA growth in the mid-to-high single digits. CEO Dara Khosrowshah said in a conference call:

We fully expect continued competition around the world, but we've demonstrated an ability to adjust and execute in an attractive, dynamic and highly competitive space. Our core online travel agency business is transitioning from a deep investment phase into one where we can grow in scale, while at the same time, we continue to invest in earlier-stage businesses.

Unfortunately for Expedia shareholders, however, all that investing and intense competition should also continue to weigh on margins, making the stock an easy pass for this Fool. 

More compelling tech picks
Our top technology analyst recently infiltrated one of Wall Street's most exclusive gatherings... and left with three incredible investment opportunities, straight from the CEOs. These are profit-building strategies Main Street isn't meant to hear about -- so you must act now before someone shuts us up. Click if you want "industry insider" earnings -- NOW!

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.

Compare Brokers

Fool Disclosure

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: 2708351, ~/Articles/ArticleHandler.aspx, 9/30/2016 1:05:30 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...

Today's Market

updated 3 hours ago Sponsored by:
DOW 18,143.45 -195.79 -1.07%
S&P 500 2,151.13 -20.24 -0.93%
NASD 5,269.15 -49.39 -0.93%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/29/2016 4:00 PM
EXPE $118.40 Up +2.41 +2.08%
Expedia CAPS Rating: ***