4 Things To Look For When Expedia Reports Q3 Earnings

Expedia Inc EXPE is scheduled to report earnings Thursday after the market close, and Oppenheimer analysts Jed Kelly and Jason Helfstein maintain their price target of $175 and Outperform rating.

Pay Attention To These 4 Things

1. The core online travel agency is going to be an important factor for Expedia's earnings. The analysts believe the core OTA room-nights growth should slow down. They expect them to grow 17 percent in Q3 2017, year over year, versus 19 percent in Q2 2017, which should be in line with the expectations.
2. Kelly and Helfstein are also going to pay attention to HomeAway online booking. They expect it to grow 44 percent year over year, which is likely going to be in line with the expectations.
3. 2018 EBITDA guidance is also important for Oppenheimer's analysts. They expect limited changes to 2018 EBITDA guidance because higher traveler fees should offset increased marketing expense.
4. Q3 2017 EBITDA should grow 10 percent year over year, according to Kelly and Helfstein, on the reduced Trivago outlook and higher marketing costs. They don't expect an increase of full-year 2017 EBITDA guidance above its 10 to 15 percent range.

The Oppenheimer analysts cut their Q3 2017 revenue and EBITDA estimates by 2 percent and 1 percent, respectively, now 1 percent below the Wall Street's consensus. Kelly and Helfstein also believe non-marketing OPEX is going to increase 14 percent year over year versus 10 percent in Q2 2017. Full-year 2017 and 2018 revenue estimates were lowered 1 percent and 2 percent respectively, while full-year 2017 and 2018 EBITDA estimates were lowered 2 percent and 3 percent, respectively, on higher marketing assumptions.

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