With EPS Growth And More, Expedia Group (NASDAQ:EXPE) Makes An Interesting Case

For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to investors, even if it currently lacks a track record of revenue and profit. Unfortunately, these high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson. Loss making companies can act like a sponge for capital - so investors should be cautious that they're not throwing good money after bad.

If this kind of company isn't your style, you like companies that generate revenue, and even earn profits, then you may well be interested in Expedia Group (NASDAQ:EXPE). Now this is not to say that the company presents the best investment opportunity around, but profitability is a key component to success in business.

See our latest analysis for Expedia Group

Expedia Group's Improving Profits

In the last three years Expedia Group's earnings per share took off; so much so that it's a bit disingenuous to use these figures to try and deduce long term estimates. As a result, we'll zoom in on growth over the last year, instead. Outstandingly, Expedia Group's EPS shot from US$2.11 to US$6.09, over the last year. It's not often a company can achieve year-on-year growth of 188%.

One way to double-check a company's growth is to look at how its revenue, and earnings before interest and tax (EBIT) margins are changing. EBIT margins for Expedia Group remained fairly unchanged over the last year, however the company should be pleased to report its revenue growth for the period of 8.1% to US$13b. That's encouraging news for the company!

In the chart below, you can see how the company has grown earnings and revenue, over time. Click on the chart to see the exact numbers.

You don't drive with your eyes on the rear-view mirror, so you might be more interested in this free report showing analyst forecasts for Expedia Group's future profits.

Are Expedia Group Insiders Aligned With All Shareholders?

We would not expect to see insiders owning a large percentage of a US$16b company like Expedia Group. But we are reassured by the fact they have invested in the company. We note that their impressive stake in the company is worth US$777m. Investors will appreciate management having this amount of skin in the game as it shows their commitment to the company's future.

Is Expedia Group Worth Keeping An Eye On?

Expedia Group's earnings per share growth have been climbing higher at an appreciable rate. That sort of growth is nothing short of eye-catching, and the large investment held by insiders should certainly brighten the view of the company. The hope is, of course, that the strong growth marks a fundamental improvement in the business economics. Based on the sum of its parts, we definitely think its worth watching Expedia Group very closely. However, before you get too excited we've discovered 2 warning signs for Expedia Group that you should be aware of.

While opting for stocks without growing earnings and absent insider buying can yield results, for investors valuing these key metrics, here is a carefully selected list of companies in the US with promising growth potential and insider confidence.

Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.

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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.