{"id":39587,"date":"2025-05-10T11:36:03","date_gmt":"2025-05-10T11:36:03","guid":{"rendered":"https:\/\/quickassetsmarket.com\/index.php\/2025\/05\/10\/expedias-cost-controls-offer-hope-but-analysts-see-growth-hurdles-ahead\/"},"modified":"2025-05-10T11:36:03","modified_gmt":"2025-05-10T11:36:03","slug":"expedias-cost-controls-offer-hope-but-analysts-see-growth-hurdles-ahead","status":"publish","type":"post","link":"https:\/\/quickassetsmarket.com\/index.php\/2025\/05\/10\/expedias-cost-controls-offer-hope-but-analysts-see-growth-hurdles-ahead\/","title":{"rendered":"Expedia\u2019s cost controls offer hope, but analysts see growth hurdles ahead"},"content":{"rendered":"
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Shares of Expedia Group fell sharply by more than 8.5% on Friday after the company reported first-quarter revenue that came in below Wall Street expectations, signalling a slowdown in US travel demand. <\/p>\n

The online travel platform posted revenue of $2.98 billion, falling short of the $3.01 billion expected by analysts surveyed by LSEG.<\/p>\n

The decline marks a concerning signal for the broader travel industry, which had been hoping for a strong summer season. <\/p>\n

Analysts attributed the weaker-than-expected results to economic pressures weighing on consumer spending, particularly in the United States, where Expedia generates about two-thirds of its revenue.<\/p>\n

At least 13 brokerages reduced their price targets on the stock post the earnings announcement. <\/p>\n

Large US presence adds to the drag as inbound travel is affected<\/h2>\n

Expedia\u2019s performance reflects growing consumer caution in the face of elevated interest rates, lingering inflation, and geopolitical uncertainty, including the impact of ongoing trade tensions. <\/p>\n

\u201cIt\u2019s all just a bit more pronounced in the case of Expedia, with a bigger US presence than peers,\u201d said BTIG analyst Jake Fuller.<\/p>\n

According to Barclays analysts, the recent results confirm that US travel has entered a slower phase. <\/p>\n

Piper Sandler said commentary around US inbound travel and the B2C business was “discouraging”, and suggested a “tough slog from here”.<\/p>\n

The brokerage downgraded the stock.<\/p>\n

“Expedia will continued to have balanced risk\/reward profile due to its ‘outsized exposure’ to the US demand environment, which makes up around two-thirds of its revenue,” Wedbush said in a Friday note.<\/p>\n

US demand has demonstrated the greatest signs of uncertainty of softer consumer spending in the near term, Wedbush analysts said, lowering its price target to $165 from $180.<\/p>\n

Analysts caution that low Canadian inbound travel to the US could dent summer play<\/h2>\n

One of the most striking data points was a nearly 30% drop in bookings to the US from Canada. <\/p>\n

Analysts at Truist highlighted that tensions between the two countries may have begun discouraging cross-border travel. <\/p>\n

This slump is significantly steeper than the 7% overall decline in international inbound bookings.<\/p>\n

Analysts warned that the geopolitical strain could further dent sentiment during the summer season, especially if diplomatic ties do not stabilize. <\/p>\n

They particularly cautioned about Canadian inbound travel to the US, which took a hit even though souring geopolitics only took hold in the final weeks of the quarter.<\/p>\n

Core profit margin likely to be met despite weakening travel demand<\/h2>\n

Despite the gloom, Expedia Group is expected to stay on course to meet its core profit margin targets despite signs of weakening travel demand, according to a note from Oppenheimer on Friday. <\/p>\n

The investment firm pointed to the company’s disciplined cost controls as a key factor supporting its margin resilience.<\/p>\n

Chief Financial Officer Scott Schenkel told investors during an earnings call on Thursday that the online travel platform now anticipates its full-year EBITDA margin will expand by 75 to 100 basis points. <\/p>\n

That marks an improvement over its earlier forecast of a 50-basis-point increase, according to a transcript from FactSet.<\/p>\n

Despite the improved profitability outlook, Expedia revised its revenue growth guidance downward. <\/p>\n

Management now expects revenue to rise by 2% to 4% over the full year, compared with a prior projection of 4% to 6%.<\/p>\n

For the current quarter, the company forecasts revenue growth in the range of 3% to 5%, along with a similar 75 to 100 basis point increase in EBITDA margin.<\/p>\n

Stock performance hinges on the macroeconomic picture<\/h2>\n

While gross bookings missed forecasts, Expedia managed to deliver adjusted earnings before interest, taxes, depreciation, and amortization above expectations. <\/p>\n

The company\u2019s business-to-business segment showed relatively stronger performance thanks to its wider international reach.<\/p>\n

Still, the outlook remains tepid. <\/p>\n

The company\u2019s second-quarter and full-year guidance fell modestly below consensus expectations. <\/p>\n

“While Expedia investors do value profitable growth, returning to a focus on profitable growth isn’t the messaging those investors want to hear right now, even if it is the right move,” Benchmark analyst Daniel Kurnos says in a research note.<\/p>\n

There needs to be a better growth component to the Expedia story for the stock to really work, the analyst says. <\/p>\n

“That said, it probably wouldn’t take much for shares to pick up some low-hanging fruit as long as the broader macroeconomic picture doesn’t get worse.”<\/p>\n

The post Expedia’s cost controls offer hope, but analysts see growth hurdles ahead<\/a> appeared first on Invezz<\/a><\/p>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

Shares of Expedia Group fell sharply by more than 8.5% on Friday after the company reported first-quarter revenue that came in below Wall Street expectations, signalling a slowdown in US travel demand. The online travel platform posted revenue of $2.98 billion, falling short of the $3.01 billion expected by analysts surveyed by LSEG. The decline <\/p>\n","protected":false},"author":1,"featured_media":39588,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":{"0":"post-39587","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-investing"},"_links":{"self":[{"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/posts\/39587","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/comments?post=39587"}],"version-history":[{"count":0,"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/posts\/39587\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/media\/39588"}],"wp:attachment":[{"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/media?parent=39587"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/categories?post=39587"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/tags?post=39587"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}