Expedia Falls 7% in a Month: Should You Buy, Sell or Hold the Stock?

Core Viewpoint - Expedia's stock has experienced a decline of 6.6% over the past month, although it has outperformed the Zacks Retail-Wholesale sector and the Zacks Internet - Commerce industry, which saw declines of 7.6% and 9.4% respectively [1] Group 1: Financial Performance and Guidance - The company anticipates lower revenue growth of 3-5% for Q1 2025, compared to 8% growth in the same quarter last year [2] - The Zacks Consensus Estimate for Q1 2025 earnings is currently at 43 cents per share, a significant increase from 7 cents per share over the past 30 days, indicating year-over-year growth of 104.76% [3] - For 2025, Expedia expects revenue growth in the range of 4-6% year-over-year, with a consensus revenue estimate of $3.03 billion, reflecting a year-over-year increase of 4.87% [3] - The company has consistently beaten the Zacks Consensus Estimate for earnings in the past four quarters, with an average surprise of 45.86% [4] Group 2: Challenges and Competition - Expedia faces foreign exchange headwinds and lower bookings due to the Leap Year and Easter shift to April, along with a seasonal decline in travel demand impacting the broader market [5] - The company is under intense competitive pressure from rivals such as Booking Holdings, Tripadvisor, and Airbnb, which have expanded their offerings and improved their business models [6] Group 3: Strategic Initiatives - Expedia has planned several initiatives for 2025, including the integration of Generative AI technology to enhance personalization, optimize marketing, improve customer service, drive operational efficiency, and strengthen B2B partnerships [7] - The company is also partnering with Flex Pay to offer flexible payment options for cruise bookings in the U.S. and Canada, which is expected to increase bookings and conversion rates [8] Group 4: Investment Outlook - Despite strong travel demand and new initiatives, Expedia's weak Q1 2025 guidance, foreign exchange challenges, and intense competition suggest that holding the stock may be the best approach for now, as indicated by its Zacks Rank 3 (Hold) [9]