Expedia (EXPE) Stock Forecast & Price Target

Expedia Group has provided guidance for a notable EBITDA margin expansion of 50-100 basis points, alongside a revenue increase of 4-6%, signaling improved profitability prospects. The potential for a 3-4 percentage point improvement in the competitive landscape for its key brands, Hotels.com and Vrbo, suggests that consolidated bookings growth could reach the upper end of the company's 5-7% target range for the third quarter. Additionally, encouraging trends in global site traffic and receipt sales point to a strengthening in business-to-consumer bookings, which may bolster overall performance moving forward.

Expedia Group faces significant headwinds that contribute to a negative outlook on its stock, particularly due to a decline in US B2C bookings, which decreased by 1-2% in the second quarter, hinting at potential tapering of consolidated growth. Additionally, the company is confronting pressure on EBITDA margins in its core hotel business, driven by rising sales and marketing expenses, which are unlikely to reverse in the near term. Furthermore, the company's shift towards ramping its international hotel supply may lead to revenue per room night volatility, adversely impacting overall financial performance, as evidenced by a nearly 10% year-over-year decline in net revenue.