Expedia (EXPE) PT Raised to $190 at DA Davidson

DA Davidson analyst Tom White raised the price target on Expedia (NASDAQ: EXPE) to $190.00 (from $135.00) while maintaining a Neutral rating.

The analyst comments "We remain NEUTRAL-rated on EXPE and update our estimates following the company's 3Q'24 results reported on 11/7. As for the quarter, EXPE's 3Q came in 2.6% ahead of expectations on GBs (with Consumer accelerating for the second straight quarter), with consolidated revenues slightly below consensus (impacted by incremental FX headwinds). 3Q adj. EBITDA of $1,250M came in ahead of $1,229M consensus on effective expense management. changes to our estimates - We are modestly trimming our 2025 revenue estimate by 1.5% to $14,926M due to higher mix of Air revenue. Our 2025 adj. EBITDA estimate declines by less than 1%, from $3,272M to $3,252M. We are raising our 12-month price target however from $135 to $190 (implies 8.4x our 2025 EV/EBITDA) due to the resilient travel demand backdrop and the broader recent re-rating in technology stocks. 3Q'24 headline results: GBs and EBITDA ahead of expectations; Revenue a bit below – Gross Bookings were $27.5B (+7% Y/Y) and came in above our estimate of $26.7B and consensus of $26.8B. 3Q revenue was $4,060M (+3.3% Y/Y and +5% ex-FX, within the guidance range of 3-5% Y/Y), but a bit below our est of $4,114M and consensus of $4,113M. Adj. EBITDA came in at $1,250M (+2.8% Y/Y) above our estimate of $1,229M and consensus of $1,232M. 4Q outlook – EXPE expects 4Q GB growth of 6-8% Y/Y (implies $22,972M-$23,406M in GBs. Due to a more favorable outlook for EXPE’s air business (a lower revenue-margin offering than lodging), revenue growth is expected to be ~1 point lower than GB growth (implies 5-7% growth Y/Y). EBITDA and EBIT margins are expected to be relatively in line with last year as EXPE leans into marketing investments in Vrbo and international markets (implies ~18.4% margins). Raising CY’24 guide for GBs and EBITDA – EXPE is now expecting GBs to be up 5% Y/Y (vs. prior of 4%), and revenue growth is still expected at ~6%. CY’24 EBITDA and EBIT margins are now expected to be slightly up vs. last year (>20.9%), vs. prior outlook of flat levels"

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