Results: Expedia Group, Inc. Exceeded Expectations And The Consensus Has Updated Its Estimates

It's been a pretty great week for Expedia Group, Inc. (NASDAQ:EXPE) shareholders, with its shares surging 20% to US$203 in the week since its latest full-year results. The result was positive overall - although revenues of US$14b were in line with what the analysts predicted, Expedia Group surprised by delivering a statutory profit of US$8.95 per share, modestly greater than expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Expedia Group

Taking into account the latest results, the consensus forecast from Expedia Group's 32 analysts is for revenues of US$14.5b in 2025. This reflects a reasonable 5.8% improvement in revenue compared to the last 12 months. Per-share earnings are expected to grow 15% to US$11.01. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$14.6b and earnings per share (EPS) of US$10.65 in 2025. So the consensus seems to have become somewhat more optimistic on Expedia Group's earnings potential following these results.

The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 9.4% to US$210. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Expedia Group analyst has a price target of US$290 per share, while the most pessimistic values it at US$163. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Expedia Group's past performance and to peers in the same industry. We would highlight that Expedia Group's revenue growth is expected to slow, with the forecast 5.8% annualised growth rate until the end of 2025 being well below the historical 12% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 9.7% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Expedia Group.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Expedia Group's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Expedia Group going out to 2027, and you can see them free on our platform here..

It is also worth noting that we have found 2 warning signs for Expedia Group that you need to take into consideration.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.