Can Expedia Stock Return To Pre-Inflation Shock Highs?

Expedia’s stock (NASDAQ
NDAQ
: EXPE), a travel company providing everything from airline tickets, to hotel rooms, and car rentals, currently trades at $119 per share, around 44% below its level of almost $214 seen on February 16, 2022 (pre-inflation shock high), and has the potential for sizable gains. EXPE saw its stock trading at around $84 at the end of December 2022, when the Fed kept increasing rates, and now remains 42% above that level. In comparison, the S&P 500 gained about 20% during this period. The company’s stock benefited as airlines and hotels have continued to see strong bookings even as the economy has shown signs of weakening. The first quarter of 2023, particularly, saw strong travel demand driven by increasing international travel, major city travel, and the reopening of Asia.

Returning to the pre-inflation shock level means that Expedia will have to gain about 80% from here. While it has the potential to recover to those levels, we estimate Expedia’s Valuation to be around $110 per share, almost 8% below the current market price. Expedia continues to invest in areas like technology, customer loyalty, and growing its business-to-business platform. In addition, it is also discussing its testing and deployment of artificial intelligence tools, including its recent integration of ChatGPT into its iOS platform. Our detailed analysis of Expedia’s upside post-inflation shock captures trends in the company’s stock during the turbulent market conditions seen over 2022 and compares these trends to the stock’s performance during the 2008 recession.