Q3 Earnings Preview for Expedia (NasdaqGS:EXPE)

in EARNINGS/INVESTING IDEAS by

Expedia Group, Inc. (NasdaqGS:EXPE) is scheduled to report Q3 earnings results after markets close for trading on November 4, 2020.

The company is expected to report earnings of -$0.79/share on revenue of $1.353 billion. The consensus earnings per share (EPS) of -$0.79/share is based on a poll of 30 analysts and represents a decline in eps of −123.3% over the same quarter last year, when the company reported earnings of $3.38/share.

The revenue forecast of $1.353 billion based on a poll of 27 analysts implies a year-over-year (YoY) decline in revenue of −62.0%. Last year the company reported $3.558 billion in revenue for the quarter.

Expected to report EPS of -$0.79/share for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $1,352.71 $3,558.00 −62.0%
EPS -$0.79 $3.38 −123.3%

Earnings Call Trends

Historically, management has exceeded analyst expectations 5 out of the last 8 tracked quarters, and missed expectations 3 quarters.

What are your expectations from Expedia Group, Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 -$3.32 -$4.09 -23.3% Missed
Q1, 2020 -$1.36 -$1.83 -34.9% Missed
Q4, 2019 $1.18 $1.24 4.7% Beat
Q3, 2019 $3.81 $3.38 −11.2% Missed
Q2, 2019 $1.67 $1.77 5.7% Beat
Q1, 2019 -$0.36 -$0.27 25.3% Beat
Q4, 2018 $1.06 $1.24 17.0% Beat
Q3, 2018 $3.12 $3.65 16.9% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by falling −5.1%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 30, 2020 $85.32 $81.01 −5.1% Decline
May 20, 2020 $76.35 $77.01 0.9% Increase
February 13, 2020 $110.97 $122.80 10.7% Increase
November 6, 2019 $135.02 $98.29 −27.2% Decline

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.84, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.84 implies a 0.2% chance of earnings manipulation.

Fundamentals And Technical Analysis

Expedia Group, Inc. is currently trading at $93.40/share, down −1.8% for the day. The company is trading at approximately 67.3% of its 52-week high of $138.72/share. The company’s stock price is up 15.3% since the last earnings report and up 0.8% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 49.40 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGS:EXPE Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of −8.39 and a forward P/E multiple of −14.85.

Expedia Group, Inc.’s current share price also implies a price-to-book (P/B) multiple of 7.59. The following table summarizes some other key fundamental ratios:

Data as of October 28, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $93.40
P/E Ratio −8.4x
P/E Ratio (Fwd) −14.9x
PEG Ratio 0.0
Total Debt / Total Capital 38.8%
Levered Free Cash Flow -$4.23 billion
EV / EBITDA 339.1x

Finbox

Expedia Group, Inc. is a large-cap stock with a market capitalization of $13.426 billion and a total enterprise value of $20.538 billion. The company operates in the Consumer Discretionary sector and the Internet & Direct Marketing Retail industry.

Expedia Group, Inc. operates as an online travel company worldwide. It operates through four segments: Core Online Travel Agencies, Trivago, Vrbo, and Egencia. Its brand portfolio include Brand Expedia, a full-service online travel brand with localized websites; Hotels.com for marketing and distributing lodging accommodations; Vrbo, an online marketplace for the alternative accommodations; Expedia Partner Solutions, a business-to-business brand that provides travel offerings for various airlines and hotels, online and offline travel agencies, loyalty and corporate travel companies, and various consumer brands; and Egencia, which provides corporate travel management services. The company’s brand portfolio also comprise Orbitz, Travelocity, and CheapTickets travel Websites; ebookers, a full-service travel brand; Hotwire, an online travel Website; Expedia Group Media Solutions that provides media partnerships and digital marketing solutions; trivago, an online hotel metasearch platform; and Expedia Local Expert, a provider of online and in-market concierge services, activities, experiences, and ground transportation. In addition, its brand portfolio consists of CarRentals.com, an online car rental booking service; Classic Vacations, a luxury travel specialist; Expedia CruiseShipCenters, a provider of advice for travelers booking cruises and vacations; and SilverRail, a provider of a rail retail and distribution platform connecting rail carriers and suppliers to online and offline travel distributors. Further, the company provides online travel services through its Wotif.com, lastminute.com.au, travel.com.au, Wotif.co.nz, and lastminute.co.nz brands; loyalty programs; and advertising and media services. It serves leisure and corporate travelers. The company was formerly known as Expedia, Inc. and changed its name to Expedia Group, Inc. in March 2018. Expedia Group, Inc. was founded in 1996 and is headquartered in Seattle, Washington.

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