EXPE: AI Disintermediation Fears And Execution Improvements Will Shape Future Risk Balance

Analysts have raised their blended price target for Expedia Group slightly to approximately $270 per share, reflecting modestly improved assumptions for revenue growth and margins following a series of post Q3 target hikes. These revisions view recent AI related fears as overstating long term disintermediation risk while acknowledging solid execution in both B2B and B2C.

Analyst Commentary

Street research on Expedia Group has tilted more constructive following its Q3 performance, but views remain nuanced as investors weigh execution gains against evolving competitive and AI related risks. The recent cluster of target hikes, alongside multiple rating upgrades, signals growing confidence in the durability of the turnaround, while a core group of cautious voices continues to focus on macro uncertainty and structural questions around long term growth.

Bullish Takeaways

• Bullish analysts highlight Expedia's strong Q3 print, citing upside in B2B and B2C, better than expected revenue and bookings growth, and solid margin flow through as evidence that the operational reset is translating into tangible financial outperformance.
• Several firms raising price targets into the mid to high $200s see the stock's valuation as attractive at current levels. They argue that the market has not fully priced in improved marketing efficiency, technology re platforming benefits, and management's sharpened focus on loyalty economics.
• Supportive commentary around recent AI related volatility frames the selloff as an overreaction. Bullish analysts contend that online travel platforms with global scale, differentiated supply, and strong performance marketing capabilities, including Expedia, remain well positioned in an AI enabled landscape.
• Some neutral rated but constructive research points to a more favorable U.S. travel backdrop than initially feared. This suggests that consensus estimates and long term growth assumptions may still have room to drift higher as execution stays on track.

Bearish Takeaways

• Bearish analysts and more cautious voices emphasize that despite better execution, risk reward is still viewed as balanced given ongoing macro uncertainty, limited visibility into consumer travel demand, and sensitivity to shocks such as government shutdown risk and flight disruptions.
• There is lingering concern that AI enabled travel tools, including potential agentic booking flows embedded in large platforms, could incrementally compress online travel agencies' role in the funnel over time. This is seen as a factor that could keep a lid on multiple expansion until the competitive landscape is clearer.
• Some research flags the risk that competitive pressure from alternative accommodations platforms pushing more aggressively into hotels could weigh on Expedia's valuation, particularly if B2C acceleration slows or marketing optimization proves less durable than expected.
• Neutral and hold stances, even with higher price targets, underscore skepticism that current improvements will translate into sustained outperformance through 2026. Analysts in this camp prefer to wait for clearer evidence of durable mid cycle growth and insulation from long term disintermediation risk.

What's in the News

• Launch of a new Set Jetting travel hub that curates hotels, activities, and flights around screen inspired destinations, targeting Gen Z and Millennial travelers who increasingly plan trips based on movies and TV series (company product announcement).
• Unveiling of a broad suite of AI and machine learning powered tools, including Smart Trip AI trip planning, a Merchandising API, a Typeahead API, and Lodging Sponsored Listings APIs, aimed at improving personalization, conversion, and partner monetization across the marketplace (company product announcement).
• Increased 2025 revenue growth guidance to 6% to 7%, up from a prior range of 3% to 5%, indicating stronger confidence in near term demand and operational execution (company guidance).
• New revenue outlook for the fourth quarter of 2025, with guidance for 6% to 8% growth, highlighting expectations for continued momentum into year end (company guidance).
• Completion of a large scale share repurchase program, buying back nearly 16% of shares outstanding for more than $3.1 billion, which enhances per share metrics and reflects management confidence in the equity value (company buyback update).

Valuation Changes

• Fair Value: risen slightly from approximately $269.79 to $270.24 per share, reflecting modestly higher long term assumptions.
• Discount Rate: increased marginally from about 8.75% to 8.80%, implying a slightly higher required return on equity.
• Revenue Growth: edged up from roughly 6.95% to 7.00%, indicating a small improvement in top line growth expectations.
• Net Profit Margin: increased slightly from around 13.89% to 13.94%, signaling a modest upgrade to long term profitability assumptions.
• Future P/E: declined very slightly from about 14.92x to 14.89x, suggesting a marginally lower valuation multiple applied to forward earnings.