Expedia Has 100% Upside, The Bears Are Wrong
Fri, Apr. 29, 5:30 PM
- Much as it did following its Q4 report, Expedia (EXPE +8.2%) flew higher today following an earnings reporting featuring solid bookings figures. The online travel giant beat Q1 estimates and reported a 13% Y/Y increase in gross bookings when excluding its divested eLong unit and its recently-acquired Orbitz and HomeAway units. Including Orbitz and HomeAway, bookings rose 32% to $18.9B.
- Top-line performance/metrics: Room nights rose 32% Y/Y excluding Orbitz and HomeAway, and 37% otherwise. With revenue/night declining 9%, hotel revenue grew 25%. Air ticket revenue (boosted by Orbitz) rose 54%, with ticket sales rising 52% and revenue/ticket 1%.
U.S. bookings (received a strong M&A lift) rose 38% to $12.3B. International bookings rose 22% to $6.6B. Properties within Expedia's global lodging portfolio rose 23% Y/Y to over 282K.
- Sales/marketing spend (much of it going to search ads) rose 36% Y/Y in Q1 to $1.04B, and $312M has been spent YTD to buy back 2.9M shares (boosted EPS). Free cash flow fell 2% to $931.7M.
- On the earnings call (transcript), Expedia reiterated guidance for adjusted EBITDA to grow 35%-45% in 2016, with Orbitz/HomeAway contributing $270M-$325M. The company still expects "the vast majority" of this year's adjusted EBITDA to be produced in 2H16.
- Expedia's Q1 results, earnings release
Fri, Apr. 29, 9:12 AM
- Gainers: PRGN +75%. GNW +16%. P +13%. AMZN +12%. SDRL +11%. EXPE +11%. MNST +11%. ROVI +10%. SNMX +9%. LNKD +7%. CRC +7%. DNR+7%. DRYS +7%. TIVO +6%. LGCY +6%. SHPG +5%. GPL +5%.
- Losers: BIOC -22%. GLNG -17%. EPAY -17%. MOH -15%. SRCL -15%. IMGN -14%. SYNA -11%. AKS -8%. HCLP -8%. ALR -6%. GILD -6%. RXDX -6%.
Thu, Apr. 28, 5:35 PM
Thu, Apr. 28, 4:05 PM
Mon, Feb. 22, 7:07 AM| Mon, Feb. 22, 7:07 AM
Wed, Feb. 17, 10:14 AM
- Expedia (EXPE +6.4%) and TripAdvisor (TRIP +4.1%) are seeing healthy gains as Priceline (PCLN +10.6%) surges after beating Q4 estimates and reporting bookings growth accelerated to 13% Y/Y from Q3's 7% (and beat guidance for 1%-8% growth). Last week, Priceline and TripAdvisor gained in response to Expedia's Q4 numbers.
- Guidance: Priceline's Q1 top-line guidance is healthy: Bookings are expected to rise 12%-19% Y/Y (18%-25% exc. forex), room nights by 20%-27%, and revenue by 9%-16% (compares with Q4's 9%). EPS guidance of $9.00-$9.60 is below a $9.61 consensus, but (as Q4 results show) Priceline has a history of issuing conservative EPS outlooks.
- Q4 top-line performance: International revenue (89% of total revenue) rose 15.9% Y/Y (29% exc. forex) to $10.7B; U.S. revenue fell 7.6% to $1.3B. Agency revenue rose 15.3% to $10.3B; merchant revenue fell 0.9% to $1.7B.
Room nights booked rose 26.6% to 99.1M, an improvement from Q3's 22% growth and the highest growth rate seen since Q3 2014. Rental car days +10.6% to 12.2M vs. +13% in Q3. Air tickets -2.6% to 1.7M vs. -1.1% in Q3.
- Financials: GAAP operating expenses rose 11% Y/Y to $1.22B - $582M was spent on online ads (much of it going to Google), $33.4M on offline ads, $83.7M on sales/marketing, $106.6M on G&A, $32.3M on IT, $70.7M on depreciation/amortization, and $312.6M on "Personnel" expenses, including stock compensation.
Priceline ended Q4 with $2.6B in cash, $7.9B in long-term investments, and $6.2B in long-term debt.
- Priceline's Q4 results, earnings release
Thu, Feb. 11, 9:13 AM
- Gainers: DDD +15%. AG +14%. FSM +13%. TRIP +12%. MUX +11%. AUY +11%. SBGL +11%. GFI +10%. AGI +10%. LC +10%. GG +10%. CDE +9%. EGO +9%. KGC +9%. HMY +9%. IAG +9%. EXPE +8%. ABX +8%. NEM +8%. SLW +8%. SSRI 8%. AU 7%. AEM 7%. HL 7%. NG 7%. CSCO 6%. SKX 5%.
- Losers: FLO -18%. INCY -15%. SFL -13%. MYL -13%. BTU -13%. ZNGA -13%. SNOW -11%. IFF -10%. ELMD -9%. AVP -8%. CS -7%. BCS -7%. SUNE -6%. CIG -5%. TWTR -6%.
Wed, Feb. 10, 5:40 PM
Wed, Feb. 10, 5:33 PM
- Though Expedia (NASDAQ:EXPE) missed Q4 EPS and (to a lesser extent) revenue estimates, the company reported gross bookings rose 32% Y/Y (40% exc. eLong, which has been divested) to $15B. Excluding eLong and the acquisitions of Orbitz/HomeAway, bookings rose 17% to $12.5B.
- Top-line performance: Expedia's core travel agency business saw bookings rise 44% to $13.6B, and its Egencia managed travel services business saw bookings rise 13% to $1.4B. U.S. bookings +50% to $9.6B; international bookings (hurt by a strong dollar) +26% to $5.4B. Hotel revenue +24%, air revenue (major boost from Orbitz) +61%, ad/media revenue +22%, other revenue +37%.
- Metrics: Excluding eLong (and including Orbitz/HomeAway), room nights rose 39% Y/Y to 52.8M thanks to both M&A and organic growth. U.S. room nights +33%, international +47%. Revenue/night fell 11%. Air ticket sales rose 70% thanks to Orbitz, with revenue/ticket dropping 5%.
- Financials: Thanks in part to Orbitz/HomeAway, adjusted costs/expenses rose 37% Y/Y to $1.57B, with sales/marketing spend rising 33% to $775M and R&D 48% to $170M. $45M was spent on buybacks. 2015 free cash flow was $581M (-44% Y/Y due to higher capex). Expedia ended 2015 with $1.7B in cash and $3.2B in debt.
- Expedia has jumped to $106.00 after hours. Priceline (NASDAQ:PCLN) is up 4.6% to $1,080.00. TripAdvisor (NASDAQ:TRIP) is up 6.7% to $58.00.
Fri, Feb. 5, 12:43 PM
- On a day the Nasdaq is down 2.4%, Internet stocks are seeing outsized losses after LinkedIn (down 41.3%) issued weak Q1/2016 guidance with its Q4 beat.
- The professional social networking leader forecast its corporate hiring solutions business would see slower growth in 2016 (international macro issues were blamed). It also noted display ad sales fell by a high-30s % Y/Y in Q4 amid ongoing secular industry pressures, and reported just 7% Y/Y unique visitor member growth.
- Facebook (FB -5.5%), which soared last week after blowing away Q4 estimates on the back of 57% Y/Y ad revenue growth, is among the casualties. As is Amazon (AMZN -4.9%), which sold off last week after missing Q4 estimates and issuing in-line Q1 sales guidance, is also down sharply. As is Twitter (TWTR -5.3%), which reports in five days and continues trading near post-IPO lows amid growth/engagement concerns.
- Other decliners include Yelp (YELP -7.9%), TripAdvisor (TRIP -6.3%), Expedia (EXPE -6%), LendingClub (LC -8.3%), Wix.com (WIX -6.8%), Wayfair (W -7.6%), Groupon (GRPN -4.9%), Shopify (SHOP -6.3%), and Zillow (Z -6%), as well as ad tech firms Criteo (CRTO -8.9%) and TubeMogul (TUBE -7.6%). The aforementioned companies are generally expected to post Q4 results in the coming weeks.
- Earlier: Enterprise software and security stocks hammered after Tableau/LinkedIn's earnings
Nov. 24, 2015, 11:15 AM
- Priceline (PCLN -3.4%), Expedia (EXPE -3.5%), and TripAdvisor (TRIP -2.9%) are under pressure after the State Department (citing fears more attacks are planned) issued a global travel alert for Americans in the wake of the Paris attacks. The Nasdaq is down 0.8%.
- The alert doesn't call on Americans to avoid traveling, but does urge them to "exercise vigilance when in public places or using transportation."
- Of the three companies, Priceline has the most international exposure: 88% of its Q3 bookings came from non-U.S. markets, with a large chunk coming from Europe via the company's Booking.com unit.
- Expedia received 46% of its Q3 revenue from outside the U.S.. TripAdvisor got 47% of its Q3 revenue from outside North America.
Nov. 16, 2015, 9:57 AM
- A group of travel, lodging, and airline stocks are weaker than broad market averages on heightened concerns over global travel and tourism after the Paris attacks.
- Notable decliners include Delta Air Lines (DAL -1.8%), American Airlines Group (AAL -1.6%), Priceline (PCLN -4.5%), Expedia (EXPE -2.1%), China Lodging Group (HTHT -0.6%), Wyndham Worldwide (WYN -2.5%), Hilton Worldwide (HLT -2.6%), and Intercontinental Hotels Group (IHG -1.6%).
Nov. 9, 2015, 2:12 PM
- Down on Friday in response to TripAdvisor's Q3 miss and full-year guidance cut, Expedia (EXPE -2.5%) is underperforming today after archrival Priceline (PCLN -9.5%) provided below-consensus Q4 EPS guidance to go with a Q3 beat.
- Priceline's gross bookings rose 7% Y/Y in Q3 (22% exc. forex) to $14.8B, and are expected to rise 1%-8% in Q4 (13%-20% exc. forex). Expedia, which is less dependent on international sales (and thus hurt less by a strong dollar) than Priceline, saw bookings (exc. eLong) rise 21% Y/Y in Q3 to $15.4B. Excluding forex, growth was 26%.
- Separately, Piper's Mike Olson (Neutral rating, $130 target) thinks Expedia's forecast for the HomeAway (AWAY -1.7%) deal to boost EBITDA by $350M in 2018 is conservative, given HomeAway's recent introduction of a 6% traveler booking fee. He thinks the booking fee could add over $1B/year in revenue by 2018, and expects synergies between HomeAway and Expedia's platforms to significantly boost booking volume for vacation property owners.
Nov. 6, 2015, 1:32 PM
- Priceline (PCLN -1.6%) and Expedia (EXPE -2.9%) have sold off after TripAdvisor (TRIP -6.8%) posted a Q3 miss and cut its full-year revenue growth forecast. On its earnings call (transcript), TripAdvisor stated the rollout of Instant Booking (allows bookings to be made on TripAdvisor's site/apps, Priceline recently signed up) is affecting near-term revenue by pushing out revenue recognition relative to referral (click-based) payments.
- Also: Priceline says it's uninterested in making a rival bid for top vacation rental marketplace HomeAway (AWAY -6.2%), which recently agreed to a $3.9B sale to Expedia. HomeAway has fallen to $37.73, a price close to what Expedia's cash/stock offer is currently worth.
- TripAdvisor's management faced earnings call questions about the impact of Instant Booking on monetization and conversion rates. It insisted IB, and the the Priceline deal in particular, will be a major positive. "The reason Priceline enables us to accelerate our [Instant Booking] rollout globally is because of the rich content that they have on 400,000 plus properties all around the globe, and by that I mean they are able to successfully take bookings on 400,000 plus properties in multiple, multiple, different language, processing payments for multiple different credit card by multiple different banks."
- At the same time, management is taking a cautious approach to modeling international IB sales. "[W]hile we have the decent amount of experience now in U.S. and U.K., we don't quite know how [Instant Booking] is going to flowing in, in France, in Japan, all throughout age, all throughout all the other markets that we look to roll it out in."
- Oppenheimer's Jed Kelly has downgraded TripAdvisor to Perform, citing slightly weaker hotel trends and the "monetization drag" Instant Booking could have in the near-term. Nonetheless, he thinks the Priceline deal "should eventually enhance earnings long term, especially as revenue leakage and improving mobile monetization eventually equates to higher revenue per hotel shopper."
- Priceline and TripAdvisor rallied last week in response to Expedia's Q3 results and full-year guidance hike. Priceline reports on Monday morning.
Nov. 4, 2015, 5:33 PM
- Expedia (NASDAQ:EXPE) is now up strongly after hours in response to news it's buying HomeAway (NASDAQ:AWAY) for $3.9B. HomeAway has risen to $39.26 - at Expedia's current trading levels, the company's cash/stock payout for HomeAway is worth $39.06/share. (PR)
- Expedia CEO Dara Khosrowshahi: "We have long had our eyes on the fast growing ~$100 billion alternative accommodations space and have been building on our partnership with HomeAway, a global leader in vacation rentals, for two years ... we look forward to partnering with them to accelerate their shift from a classified marketplace to an online, transactional model to create even better experiences for HomeAway's global traveler audience and the owners and managers of its 1.2 million properties around the world."
- The deal is partly seen as an attempt to counter the rise of home/apartment rental marketplace Airbnb (Pending:AIRB), which was reportedly valued at an eye-popping $25.5B in a June round. Airbnb has long been seen a threat to HomeAway (though HomeAway has insisted it differs from Airbnb due to its focus on secondary home rentals), and Expedia admitted on its Q3 earnings call Airbnb could exert price pressure in some hotel markets by increasing available room inventory.
- Earlier: Expedia buying HomeAway for $3.9B
Nov. 4, 2015, 4:21 PM
- Expedia (NASDAQ:EXPE) is buying leading vacation rental marketplace HomeAway (NASDAQ:AWAY) for $3.9B in cash and stock, or $38.31/share based on Expedia's Tuesday close.
- Expedia will pay $10.15/share in cash and issue 0.2065 shares for each HomeAway share. The deal is expected to close in Q1 2016.
- AWAY is halted. EXPE is up fractionally after hours.
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... More
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