What's Driving The 33% Stock Rally For Expedia?

Core Insights - Expedia's stock has increased approximately 33% since the beginning of 2024, outperforming the S&P 500's 27% gain, while competitor Tripadvisor has seen an 18% decline [1] - Key drivers of Expedia's growth include a rebound in travel demand, particularly in the U.S. and Asia-Pacific regions, and a strategic expansion into the B2B sector, which now accounts for 27% of total bookings [1] - The reinstatement of a quarterly dividend at $0.40 per share has positively impacted investor sentiment and stock price [1] - Expedia's Q4 financial results exceeded expectations, with revenue and earnings growth, and the company forecasts 4-6% growth in gross bookings and revenue for 2025 [1] Financial Performance - For the full year 2024, Expedia reported revenue of $13.7 billion, a 7% year-over-year increase, with total gross bookings also rising 7% to $110.0 billion [2] - B2B revenue surged 21% year-over-year to $4.1 billion, while B2C revenue grew modestly to $9.3 billion [2] - The diluted earnings per share (EPS) increased by 69% to $8.95, and adjusted EPS rose 25% year-over-year to $12.11 [2] - EBITDA climbed 9% year-over-year to $3 billion for FY 2024 [2] Stock Volatility and Projections - EXPE stock has shown significant volatility over the past four years, with annual returns of 36% in 2021, -52% in 2022, 73% in 2023, and 23% in 2024 [3] - Revenue for fiscal year 2025 is projected to reach $14.5 billion, reflecting a 6% year-over-year increase, with a revised valuation of approximately $205 per share based on an expected GAAP EPS of $11.24 [4] Strategic Initiatives - Expedia continues to benefit from strong global travel demand and improved profit margins in both B2B and B2C segments [5] - The company is focused on strategic technology investments and customer loyalty initiatives, including AI integration [5] - Shareholder value is being enhanced through targeted share buybacks and the "One Key" loyalty program, which aims to boost customer retention and repeat business [5]