Expedia (EXPE) Beats on Top Line but EBITDA Fails to Impress

April 26, 2013 12:47 PM EDT Send to a Friend
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Price: $77.25 +3.59%

Rating Summary:
    15 Buy, 24 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 37 | Down: 17 | New: 30
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Yesterday Expedia reported Q1 results that were ahead of consensus, with a healthy beat on the top line ($1.10B vs $965.77M) and EPS that was 2 cents ahead of consensus. However, EBITDA fells short at $105.1 million vs $104.4 million. Analyst Heath P. Terry of Goldman Sachs said this was because of marketing deleverage associated with newly acquired Trivago.

"Our 2013-2015 revenue estimates increase 1% on average to reflect better hotel performance, while our adjusted EBITDA estimates decline 3% on average to reflect higher marketing expenses from the more brand advertising driven Trivago," said Terry.

"We expect Expedia will continue to see strong bookings growth from the shift of travel dollars online and share consolidation among the largest OTAs, though with guidance for low double-digit EBITDA growth in 2013, versus the sector in the high teens, we believe the shares largely reflect these expectations," added the analyst.

Goldman Sachs has a Neutral rating on Expedia with a price target of $69.00.

For an analyst ratings summary and ratings history on Expedia (NASDAQ: EXPE) click here. For more ratings news on Expedia click here.

Shares of Expedia closed at $64.97 yesterday.


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