Is it too late to buy Expedia stock as shares spike on Q3 beat?

on Nov 5, 2021
  • Expedia shares on Friday spiked more than 15% after announcing its most recent quarterly results.
  • The company reported its FQ3 results Thursday after markets closed, beating analyst expectations.
  • EXPE expects the recovery to continue in Q4 with more countries reopening for international travellers.

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On Friday, Expedia Group Inc. (NASDAQ:EXPE) shares rallied more than 15% after reporting its fiscal third-quarter results. The company announced its most recent quarterly results Thursday after markets closed, beating the consensus for analyst expectations on revenue and earnings.

Expedia posted FQ3 non-GAAP earnings per share of $3.53, beating the average form analyst estimates of $1.68. On the other hand, its GAAP EPS of $2.26 outperformed the average Street forecast of $1.07, while revenue for the quarter increased by more than 97% from the same period last year to $2.96 billion, exceeding expectations by $240 million.

Expedia expects the recovery to continue in Q4 as more countries reopen for international travellers, thus boosting its growth outlook.

Expedia’s exciting recovery

From a valuation perspective, Expedia shares trade at a reasonable forward P/E ratio of about 23.98, making it an interesting opportunity for value investors.

On the other hand, although analysts expect earnings to decline by more than 600% this year, they also forecast a significant recovery of more than 885% next year.

Therefore, the stock could be a compelling opportunity for bargain hunters.

Source – TradingView

Technically, Expedia shares seem to be trading within an ascending channel formation in the intraday chart. As a result, the stock has spiked towards the trendline resistance, pushing it closer to overbought conditions.

Therefore, given this year’s projected earnings decline, short-term investors could target potential pullbacks at about $172.17, or lower at $160.41, while $187.96 and $199.38 are crucial resistance levels.

Should you bet long?

In summary, although Expedia shares seem perfectly positioned for a short-term pullback, the stock trades at exciting valuation multiples whilst its recovery appears to be on track after its FQ3 beat.

Therefore, long-term investors willing to overlook the short-term turbulence could still buy the stock.


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