On Thursday, Ascendiant Capital adjusted its price target for Expedia Group Inc. (NASDAQ:EXPE), reducing it to $160 from the previous $168 while still endorsing the stock with a Buy rating. The decision follows Expedia's announcement of its fiscal fourth quarter 2023 results, which were released on February 8, showcasing a revenue increase and earnings per share (EPS) that exceeded expectations.
Expedia's revenue for the quarter ending December was reported at $2,887 million, marking a 10% year-over-year growth. This figure slightly missed Ascendiant Capital's projection of $2,895 million but surpassed the consensus estimate of $2,880 million.
The pro forma EPS was a notable $1.72, which beat both the firm's estimate of $1.20 and the consensus of $1.68. Earnings before interest, taxes, depreciation, and amortization (EBITDA) reached $532 million, compared to Ascendiant Capital's expectation of $540 million and the $449 million recorded in the same quarter of the previous year.
The travel company's gross bookings saw a 6% year-over-year increase to $21.7 billion, although this was below the $24.1 billion anticipated by Ascendiant Capital. Hotel room nights increased by 9% year-over-year, reflecting the ongoing robust growth in the travel industry. The analyst noted that Expedia's EPS benefited from cost savings and effective management.
Looking forward, Expedia provided initial guidance for 2024, suggesting a continuation of the 10% revenue growth experienced in 2023 and an improvement in EBITDA margins. For the first quarter of 2024, the company expects revenue growth of approximately 5%.
In response to these positive indicators, Ascendiant Capital has revised its 2024 revenue estimates for Expedia upward to $14.0 billion from $13.8 billion and increased the EPS forecast to $10.87 from $10.62. Additionally, the firm has initiated its 2025 estimates for Expedia's revenue at $14.6 billion and EPS at $13.32.
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