On Wednesday, BTIG maintained a positive stance on Expedia Group Inc. (NASDAQ:EXPE), reiterating its Buy rating and a $150.00 price target for the company's stock.
The firm's outlook hinged on the robust performance of Expedia's Business-to-Business (B2B) segment, which has been a key driver of growth despite limited revenue disclosures.
The analysis highlighted that while Expedia's VRBO and air travel sectors had shown weaknesses, the B2B division, responsible for approximately 100 million room nights in the previous year, contributed significantly to the company's expansion.
This segment alone was estimated to account for around 60% of room night growth in 2023. The insights into the B2B's performance provided a clearer picture for modeling and understanding Expedia's growth composition and future prospects.
According to BTIG, the path to high single-digit room night growth for the current year is achievable, with expectations for the Business-to-Consumer (B2C) segment to post a mid-single-digit increase, following a 7% rise last year.
The B2B sector is projected to grow between 16-19%, which would be a deceleration from the 30% growth observed in the previous year, yet still a significant contributor to the overall growth trajectory.
The firm's analysis underscores the importance of the B2B segment in driving Expedia's performance and shaping the outlook for 2024.
The growth framework established by BTIG suggests that despite certain weak spots, the company's strong areas, particularly in B2B, could continue to bolster its position in the market.
InvestingPro Insights
With BTIG's bullish outlook on Expedia Group Inc. (NASDAQ:EXPE), recent data from InvestingPro provides additional context to the company's financial health and market performance. Expedia's management has been actively repurchasing shares, signaling confidence in the company's value—a move that aligns with a high shareholder yield. Furthermore, the company's impressive gross profit margins, which stood at a substantial 88.39% over the last twelve months as of Q1 2024, underscore the efficiency of its operations.
From a valuation perspective, Expedia is trading at a P/E ratio of 19.17, with an adjusted P/E ratio of 11.97, reflecting a potential undervaluation relative to near-term earnings growth. Additionally, the PEG ratio of 0.11 suggests that the stock may be undervalued based on its expected growth rates. While the company does not pay a dividend, its commitment to growth and profitability, demonstrated by a solid return on assets of 2.78%, could be attractive to growth-focused investors.
For those interested in deeper analysis, InvestingPro offers a comprehensive list of tips, with 14 additional insights available for Expedia. These include perspectives on stock volatility, debt levels, and analyst earnings revisions, which can further inform investment decisions. To access these insights and more, consider subscribing to InvestingPro using the coupon code PRONEWS24 for an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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