EXPE Up 14.7% in a Month: Should You Buy, Hold or Sell the Stock?

Expedia Group's EXPE shares have gained 14.7% in the past month compared with the Zacks Internet Commerce industry's return of 7.3%. It has also outperformed the Zacks Retail-Wholesale sector's rally of 6.7% over the same timeframe.

EXPE is benefiting from its strong positioning in the online travel booking space. Its robust B2B, Brand Expedia and advertising businesses along with strength in lodging offerings have been driving its momentum across U.S. and non-U.S. regions.

The company's plan to integrate generative AI technology into its services, combined with its efforts to enhance its portfolio through expanding partnerships, is anticipated to boost customer engagement in the near term.

Hence, the question investors should consider is whether these efforts will help EXPE sustain its momentum.

Let's analyze the key near-term drivers of Expedia Group.

Expanding Partnerships Drives EXPE Stock's Prospects

According to a Statista report, the global travel and tourism market is projected to reach $916 billion in 2024 and $1.11 trillion by 2029, reflecting a CAGR of 4% from 2024 to 2029.

Expedia Group is well-positioned to capitalize on this growth prospect, driven by its expanding network of partnerships.

EXPE recently announced its partnership with Ryanair, Europe's leading airline, to offer travelers access to Ryanair's budget-friendly flights. This partnership boosts choice and convenience, providing greater value for travelers looking to enhance their travel experience.

Expedia recently partnered with Alaska Airlines to introduce Stays by Alaska Vacation, a new platform offering exclusive deals and the ability to earn and redeem miles through its loyalty program. This partnership enhances the travel experience of the customers by personalizing every aspect of the trip, from flights to accommodations.

Expedia recently teamed up with Wells Fargo and Mastercard to launch two co-branded credit cards, One Key and One Key+. These cards provide U.S. travelers with greater flexibility and rewards, including OneKeyCash, which can be used on Expedia, Hotels.com, and Vrbo for various travel bookings.

Cardholders can earn OneKeyCash rewards and receive automatic upgrades to the One Key Silver and Gold tiers, offering 15% and 20% savings on over 10,000 hotels worldwide. This new partnership is likely to boost Expedia Group's popularity among U.S. travelers.

EXPE also joined forces with Cathay to embed its White Label Template technology into Cathay Holidays. This will enhance and customize the travel booking and planning experience for customers.

Expedia partnered with Tourism and Events Queensland, Tourism Tropical North Queensland, Tourism Northern Territory and Brisbane Economic Development Agency to enhance travelers' experiences, improve sustainable tourism and showcase Australia's unique culture.

EXPE has also partnered with Ikyu, a Japanese luxury hotel booking service, to provide customers with access to over 20,000 additional properties worldwide. This collaboration allows users to earn points for future bookings through EXPE's Rapid API solutions.

These partnerships are expected to drive top-line growth in the near term. The Zacks Consensus Estimate for third-quarter 2024 revenues is pegged at $4.1 billion, calling for growth of 4.3% year over year.

For 2024, the consensus mark for revenues is pegged at $13.6 billion, indicating a rise of 5.9% in the past year.

Stiff Competition Hurts EXPE Stock's Prospects

Rising competition in the travel and tourism space from major players like TripAdvisor TRIP, Airbnb ABNB and Booking Holdings BKNG poses a risk to EXPE's market position.

Although EXPE's shares have outperformed TRIP, ABNB and BKNG in the past month, their continuous efforts toward bolstering online travel booking platforms are hard to ignore. Shares of TripAdvisor and Airbnb have lost 13.1% and 8.2%, respectively, while Booking Holding's shares have appreciated 12.7% in the past month.

Tripadvisor's launch of a new feature that lets members book hotel stays directly within the app, thanks to its partnership with global travel technology provider HTS (Hopper Technology Solutions), remains noteworthy.

Airbnb introduced new features for group bookings, including an Icons category showcasing stays hosted by celebrities from music, film, TV and sports.

Booking Holdings' subsidiary, Priceline, partnered with Cover Genius to improve travel bookings by offering customer-focused travel protection. Travelers can now easily review policies, access support, file claims and receive instant payments through their XCover Account.

Earnings Estimate Shows Downward Trend

The Zacks Consensus Estimate for third-quarter 2024 earnings is pegged at $6.07 per share, indicating growth of 12.2% year over year. The estimate has moved down 8.2% in the past 30 days.

For 2024, the consensus mark for earnings is pegged at $11.53 per share, suggesting growth of 18.9% year over year. The figure has been revised downward by 2.5% in the past 30 days.

What Should Investors Do with EXPE Stock?

Expedia's strategic partnerships, strong key offerings, expanding global footprint and drive toward innovation present a compelling investment opportunity.

The company's Value Score of A suggests reflects a solid opportunity for investors at the moment.

However, stiff competition and greater volatility in travel demands due to macroeconomic uncertainties and geopolitical tensions remain major concerns for EXPE stock. Also, a downward revision in earnings estimates does bode well.

Against this backdrop, existing shareholders should maintain their positions while new investors should wait for a more favorable entry point.

Expedia Group currently carries a Zacks Rank #3 (Hold).

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