I can't be the only one who has to hold in a chuckle when analysts downgrade stocks long after they have been beaten down.
Merrill Lynch is downgrading Expedia
Analysts see earnings declining at Expedia this year, recovering only a chunk of the dip in 2010. Orbitz isn't as lucky. Wall Street sees the company posting annual losses both this year and next.
This doesn't mean that offering bargains is enough. Deal publisher Travelzoo
Will Expedia fly again?
Shares of Expedia opened nearly 5% lower on this morning's downgrade, after heading 7% lower yesterday. With Expedia's stock now in the single digits, it's only a matter of time before the ridiculous Google
A deal still doesn't make sense for Google, a company that is better off as an unbiased sponsorship outlet for all travel sites. However, Expedia certainly is starting to look cheap. It is now trading for less than 10 times this year's depressed profit estimates.
The next few quarters won't be pretty, but if it can hold its breath longer than Orbitz -- and it should -- the long-term prospects for Expedia are better than this morning's downgrade would have one believe.
Other ways to fly higher:
Longtime Fool contributor Rick Munarriz has been booking travel online since the 1990s, but he does not own shares in any of the companies in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.