What To Expect From Expedia’s Stock Post Q2?

Expedia (NASDAQ: EXPE), a travel company providing everything from airline tickets, hotel rooms, and car rentals, to cruises, is scheduled to announce its fiscal second-quarter results on Thursday, August 3. We expect Expedia’s stock to likely trade lower due to revenues and earnings missing estimates marginally. As a result of the rapid recovery of the traveling and lodging industry, the company’s revenue and operating cash flow have exceeded pre-pandemic levels – but still, its profitability continues to remain below the pre-pandemic levels. We believe that the current weaker macroeconomy could continue to pressure the company’s margins. Recent years have also seen the company accumulate its largest debt burden.

Expedia is spending heavily to enhance its tools in anticipation of further growth. Expedia is also taking advantage of the latest advances in artificial intelligence, deploying new AI and machine learning tools and integrating ChatGPT into its iOS app. This is an interesting approach, as it could help draw customer loyalty to the brand. It might also not be that hard for other large players in the industry to adopt generative AI since they have already been using AI algorithms for years. That said, it’s not clear how far ahead Expedia will be in this space at the moment and whether it will maintain a lead.