RBC Capital analyst, Mark Mahaney, sees steady sailing for Expedia (NASDAQ: EXPE) after the company missed consensus bookings, revenue, EBITDA and EPS. However, guidance showed only a minor slowdown and the profit misses may be related to modeling error. He kept the rating at Outperform but the PT drops to $165.

Gross Bookings reached $15.0B (up 18% organically, ex-FX & acquisitions), shy of the Street’s $15.2B est., as was Revenue of $1.70B vs. the Street’s $1.71B. EBITDA and EPS, however, were bigger misses of $280MM/$0.77 vs. the Street’s $308MM/$1.01. We attribute much of the miss to M&A modeling challenges. Management issued 2016 guidance of 35%-45% EBITDA growth (approx. 8-13%, a modest decline from FY15’s 10-15% initial guide). But the analyst believes this was better than many investors’ fears, given Macro concerns.

The Keys – 1) Strong Unit Growth – Room Night growth accel’ed to a multi-year high of 39% Y/Y (33% Domestic & 47% Int’l; 27% Y/Y organic vs. 28% in Q3) – these dpoints are likely the best evidence that EXPE is executing very well. 2) Organic Bookings Growth – Accelerated to 18% Y/Y vs. 17% Y/Y in Q3. 3) Acquisitions Integrations Appear Ahead Of Schedule – Mngmt commentary on the call was positive re: both Orbitz and HomeAway momentum. 4) Some ‘16 Headwinds – TRIP could be 100-200bps to Bookings growth, and lowering take-rates pressure Rev / Room Night, and Airbnb could become a challenge at some point.

Bookings and Revenue projections are increasing 2% and 1%, while EBITDA decreased 7%.

No change to Outperform rating but the PT drops to $165 PT on 21x ’17 EPS of $7.15. The PT is down from $180.

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Shares of Expedia closed at $94.35 yesterday.