Expedia Stock Surges: What’s Fueling Its Performance in 2024?

Expedia (NASDAQ: EXPE) shares are up about 33% since the start of 2024, surpassing the S&P 500, which has gained 27% in the same timeframe. In contrast, its competitor, Tripadvisor (NASDAQ: TRIP), has seen a decline of 18%. What factors are driving Expedia’s remarkable rise?

Several key elements contribute to the company’s growth. There has been a noticeable increase in travel trends, especially in the U.S. market compared to previous quarters, along with strong international demand, especially from the Asia-Pacific region. Expedia’s strategy of expanding into business-to-business (B2B) travel has paid off, with B2B bookings now representing 27% of total bookings. Enhancements to product offerings, such as the Vrbo platform, have also been beneficial. Furthermore, the reinstatement of its quarterly dividend at $0.40 per share pleased investors, which positively impacted the stock price. In its recent Q4 reports, Expedia announced better-than-expected earnings and revenue growth. Looking ahead, the company anticipates gross bookings and revenue growth of 4-6% for 2025, alongside an expected EBITDA margin increase of 50 basis points. For those seeking stable returns, the High Quality Portfolio, which has outperformed the S&P and achieved >91% returns since its inception, might be appealing.

In full-year 2024, Expedia recorded revenue of $13.7 billion, a 7% year-over-year (y-o-y) increase. Total gross bookings also grew by 7% y-o-y, reaching $110.0 billion. Particularly strong performance came from the B2B sector, with revenue -up 21% y-o-y to $4.1 billion thanks to solid corporate partnerships and increased demand from business clients. In contrast, business-to-consumer (B2C) revenue saw only a slight growth to $9.3 billion. Notably, Brand Expedia achieved a 9% increase in room nights; lodging revenue climbed by 7%, and air revenue saw a 4% rise y-o-y. Financial highlights included a 69% rise in diluted earnings to $8.95 per share and a 25% y-o-y growth in adjusted earnings to $12.11 per share. EBITDA grew 9% y-o-y, totaling $3 billion for FY 2024.

Over the past four years, EXPE stock has exhibited volatility, with annual returns fluctuating significantly. The returns were 36% in 2021, a steep -52% in 2022, an impressive 73% in 2023, and 23% in 2024. In comparison, the Trefis High Quality (HQ) Portfolio, consisting of 30 carefully chosen stocks, has displayed much less volatility and comfortably outperformed the S&P 500 over the same period. Why is that? The HQ Portfolio delivers better returns with reduced risk compared to the benchmark index, resulting in a steadier performance.

Looking forward, revenues for Expedia are forecasted to reach $14.5 billion in fiscal year 2025, reflecting a 6% y-o-y growth. As a result, Expedia’s valuation has been adjusted to about $205 per share, based on an expected GAAP EPS of $11.24 and an 18.2x P/E multiple for FY 2025, which is in line with the current market price as of February 14.

Expedia Group is capitalizing on the strong global travel demand, alongside expanding margins in both B2B and B2C segments. The company is dedicated to investing strategically in technological advancements and customer loyalty programs. This includes integrating artificial intelligence capabilities. Moreover, Expedia aims to enhance shareholder value through targeted share buybacks and its “One Key” loyalty program, which fosters customer retention and encourages repeat business.

Comparing Expedia to its peers offers further insights. The Expedia Peers section illustrates how EXPE stock stacks up against competitors based on key performance metrics. You can find additional comparisons across industries in the Peer Comparisons section.

[1] Returns as of 2/13/2025
[2] Cumulative total returns since the end of 2016

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.