Entering text into the input field will update the search result below

Expedia: Still Resilient, But Short-Term Downside Could Lie Ahead

Mar. 05, 2021 4:56 PM ETExpedia Group, Inc. (EXPE)
Discount Fountain profile picture
Discount Fountain


  • Expedia has continued to manage its liquidity position well in the face of the ongoing COVID-19 pandemic.
  • However, it is looking increasingly unlikely that summer 2021 will be the panacea that the travel industry was hoping for.
  • For this reason, I anticipate that the stock could see downside from here.

Back in January, I made the argument that while Expedia (NASDAQ:EXPE) stands to see longer-term upside given a broad-based recovery in hotel demand - I also took the view that the stock has been appreciating too fast over vaccine optimism.

This trend ultimately continued over February, although we did see the stock start to consolidate heading into March:

Source: investing.com

With Expedia being more exposed to the direct facilitation of hotel bookings than companies such as TripAdvisor (TRIP) - which acts more as a travel information platform - this is a stock that could see more upside than its peers if hotel booking demand recovers faster than expected. On the other hand, the stock could also have downside if booking demand remains subdued for longer than expected.

Recent Performance

When looking at the company's latest earnings release, we can see that growth in revenue, earnings and free cash flow was strongly negative compared to that of 2019. While the stock itself has been driven upwards by vaccine optimism, actual business performance has yet to follow suit:

Source: Expedia Group Fourth Quarter 2020 Results

While I had previously commended Expedia on increasing cash and cash equivalents by 31% to $4.353 billion in September 2020, this had moderated downwards to $3.363 billion by December 2020, which is near the same level we saw in December 2019:

Source: Expedia Group Fourth Quarter 2020 Results

However, while long-term debt is up from 2019 as a whole, the reported figure of $8.216 billion in December 2020 is only slightly up from the figure of $8.176 billion as reported in September 2020.

From this standpoint, Expedia continues to manage its liquidity position well - but eventually the company does need to return to profitability for this to continue.

Looking Forward

Since October, we can see that while

This article was written by

Discount Fountain profile picture
I am an independent investor with an interest in analyzing stocks across the consumer, finance, telecommunication, and travel sectors. As a data scientist, I also have a great interest in using data tools to better understand a company's financial position.Some examples include:- Analysing total room revenue across brands for Hyatt Hotels using data visualisation: https://seekingalpha.com/article/4632039-hyatt-hotels-stock-hyatt-regency-and-china-revpar-growth-impressive- Building a Monte Carlo simulation in Python to analyze loss ratios for Zurich Insurance Group (ZURVY): https://seekingalpha.com/article/4605533-zurich-insurance-group-premium-growth-low-loss-ratio-encouraging- Calculating seasonality of customer lifetime value (LTV) for AT&T: https://seekingalpha.com/article/4634204-att-stock-growth-customer-lifetime-value-necessary-upsideDisclaimer: All of the author's articles are written on an "as is" basis and without warranty, with no guarantee of accuracy or completeness. They represent the author's opinion only and in no way constitute professional investment advice. It is the responsibility of the reader to conduct their due diligence and seek investment advice from a licensed professional before making any investment decisions. The author disclaims all liability for any actions taken based on the information contained in any articles published.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You


Disagree with this article? Submit your own. To report a factual error in this article, . Your feedback matters to us!
To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.