Please ensure Javascript is enabled for purposes of website accessibility

Why Expedia Group Shares Jumped 15% on Friday

By Travis Hoium – Nov 5, 2021 at 5:35PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The travel industry is booming.

What happened 

Travel stock Expedia Group (EXPE -0.53%) jumped by as much as 16.9% in trading on Friday after reporting third-quarter 2021 financial results. Shares closed the day up 15%. 

So what 

Revenue was up 97% to $2.96 billion on the back of a 117% increase in gross bookings. A net loss of $221 million in the prior-year period swung to net income of $362 million, or $2.26 per share, this time around. Analysts were expecting revenue of $2.73 billion and earnings of $1.65 per share, so results easily topped estimates. 

Two people traveling in an airport.

Image source: Getty Images.

Lodging is by far Expedia's biggest business, and revenue in that segment was up 87% versus a year ago while air revenue was up 128%, and revenue from its advertising and media segment was up 116%.

Now what 

Across the board, results have shown that travel spending is up everywhere this quarter, and companies in the industry are reporting strong pricing and volume. The story was no different for Expedia. 

While this travel frenzy may not last forever, money is freely flowing in this economy, and people are spending what they have, so I don't see any signs that a slowdown is near. If its revenue growth continues, this could be a great value stock to hold for the long term, given its strong results and its forward price-to-earnings multiple of just 28 -- which doesn't factor in the adjustments that will need to be made after this quarter's earnings beat.

Travis Hoium has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.