Financial Review: Expedia (EXPE) and The Competition

Expedia (NASDAQ: EXPE) is one of 11 public companies in the “Travel Agents” industry, but how does it contrast to its rivals? We will compare Expedia to related companies based on the strength of its earnings, risk, valuation, institutional ownership, dividends, profitability and analyst recommendations.

Risk & Volatility

Expedia has a beta of 0.9, meaning that its share price is 10% less volatile than the S&P 500. Comparatively, Expedia’s rivals have a beta of 1.20, meaning that their average share price is 20% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Expedia and its rivals, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Expedia 0 7 21 1 2.79
Expedia Competitors 87 648 966 43 2.55

Expedia presently has a consensus target price of $160.03, indicating a potential upside of 30.64%. As a group, “Travel Agents” companies have a potential upside of 17.24%. Given Expedia’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Expedia is more favorable than its rivals.

Profitability

This table compares Expedia and its rivals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Expedia 4.09% 10.71% 3.52%
Expedia Competitors -18.70% -60.07% -9.98%

Earnings and Valuation

This table compares Expedia and its rivals revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Expedia $8.77 billion $281.84 million 48.42
Expedia Competitors $3.16 billion $214.58 million 15.52

Expedia has higher revenue and earnings than its rivals. Expedia is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Institutional & Insider Ownership

84.1% of Expedia shares are held by institutional investors. Comparatively, 75.3% of shares of all “Travel Agents” companies are held by institutional investors. 20.9% of Expedia shares are held by insiders. Comparatively, 17.5% of shares of all “Travel Agents” companies are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

Expedia pays an annual dividend of $1.20 per share and has a dividend yield of 1.0%. Expedia pays out 47.4% of its earnings in the form of a dividend. As a group, “Travel Agents” companies pay a dividend yield of 1.1% and pay out 46.2% of their earnings in the form of a dividend. Expedia lags its rivals as a dividend stock, given its lower dividend yield and higher payout ratio.

Summary

Expedia beats its rivals on 12 of the 15 factors compared.

About Expedia

Expedia, Inc. is an online travel company. The Company operates through four segments: Core Online Travel Agencies (Core OTA), trivago, Egencia and HomeAway. The Company’s Core OTA segment provides a range of travel and advertising services to its customers across the world, through a range of brands, including Expedia.com and Hotels.com in the United States, and localized Expedia and Hotels.com Websites throughout the world, Orbitz.com, Expedia Affiliate Network, Hotwire.com, Travelocity, Wotif Group, CarRentals.com and Classic Vacations. The Company’s trivago segment sends referrals to online travel companies and travel service providers from its hotel metasearch Websites. Its Egencia segment, which also includes Orbitz Worldwide (Orbitz) for Business, provides managed travel services to corporate customers across the world. The Company’s HomeAway segment operates an online marketplace for the vacation rental industry.

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