EXPE
Expedia Inc Del
TMT, Consumer
11/18/2016
Presented
| Date | 11/09/2016 |
| Price | $123.63 |
| Market Cap | $19.07B |
| Ent Value | $18.19B |
| P/E Ratio | 110.38x |
| Book Value | $25.91 |
| Div Yield | 0% |
| Shares O/S | 154.24M |
| Ave Daily Vol | 2,225,351 |
| Short Int | 11.53% |
Current
| Price | $151.20 |
| Market Cap | $19.68B |
| Expedia, Inc. is an online travel company. The company provides travel products and services to leisure and corporate travelers, including travel agencies, tour operators, travel supplier direct websites and call centers, consolidators and wholesalers of travel products and services, large online portals and search websites, certain travel meta-search websites, mobile travel applications, social media websites, as well as traditional consumer eCommerce and group buying websites. It also offers travel and non-travel advertisers access to a potential source of incremental traffic and transactions through its various media and advertising offerings on its transaction-based websites. The company operates through two business segments: Leisure and Egencia. The Leisure segment provides a full range of travel and advertising services to worldwide customers through a variety of brands including: Expedia.com and Hotels.com in the United States and localized Expedia and Hotels.com websites. The Egencia segment provides managed travel services to corporate customers in North America, Europe, and the Asia Pacific region. Expedia was founded on August 9, 2005 and is headquartered in Bellevue, WA. |
Publicly traded companies mentioned herein: Expedia Inc (EXPE), Tripadvisor Inc (TRIP), Priceline Group Inc (PCLN)
Highlights
The presenter is long shares of Expedia (EXPE), the dominant online travel company in the US market with over 50% market share. The company should be able to grow for many years due to the OTAs’ being “structurally underpenetrated” (the market is “nowhere near” saturation). At ~$124, the stock is flat year-to-date due to integration issues following the back-to-back acquisitions of Travelocity and Orbitz in 2015. Self-inflicted wounds (i.e., server outages) have caused EXPE’s multiple to compress, but in the presenter’s opinion the entry point is attractive because room night growth accelerated back to 20% in September (14% ex Orbitz in Sept, and 17% overall for the 3rd quarter), and the month-over-month comps should continue to be strong against easy comps. Additionally, HomeAway and Trivago could provide some optionality that will push EXPE’s annual earnings power to $9/ share looking out 3 years, and at an 18x forward multiple (which could be conservative) the implied value in 12-24 months is $160.
◆Signing up and creating account with us unlocks this content for you. Contact us today for full access to DeMatteo Research and more.
◆Signing up and creating account with us unlocks this content for you. Contact us today for full access to DeMatteo Research and more.