Expedia: Zacks’ Bull of the Day Play

Expedia, Inc. (EXPEFree Report) continues to cash in on strong demand for travel and one-stop online travel buying. This Zacks Rank #1 (Strong Buy) is expected to see double digit earnings growth again in 2017.

Expedia is the world’s largest online travel company encompassing many brands including Expedia.com, Hotels.com, Orbitz Worldwide, trivago, HomeAway, Egencia, Travelocity, Hotwire.com, Wotif Group, Classic Vacations, CarRentals.com, Venere, Expedia CruiseShipCenters and AirAsia Expedia.

Expedia acquired Orbitz in September 2015 and HomeAway in December 2015.

Big Growth in Q3 of 2016

On Oct 27, Expedia reported third quarter results and met the Zacks Consensus of $2.24.

Gross bookings rose 21% to $18.6 billion while revenue increased 33% to $2.6 billion from the 2015 quarter.

It had other strong growth metrics including a 17% year-over-year increase in room nights stayed, with growth of 11% if you exclude Orbitz Worldwide.

It gained 14,000 properties during the quarter to 321,000 worldwide.

Expansion on Amazon Alexa

Expedia has been pushing the boundaries in terms of how to get services to customers for some time.

On Nov 30, 2016, it announced travelers could ask Amazon’s Alexa devices such as the Echo and Echo Dot to give it travel updates on hotels, real-time flight status and updates on gate changes and delays, book or confirm car reservations and more.

Joins Instant Booking on TripAdvisor

On Dec 20, TripAdvisor (TRIPFree Report) announced it had an agreement with Expedia to include Expedia brands on its instant booking platform. Initially, only the US properties will be available.

Customers can click the “Book Now” button to actually book the hotel reservation instead of leaving the TripAdvisor site and opening up a separate booking website.

It’s further access to the millions of travelers who use TripAdvisor to research their travel options.

Big Growth Expected in 2017

The analysts are bullish about Expedia in 2017.

The Zacks Consensus Estimate for 2017 is $5.21 which is earnings growth of 46.6% compared to the consensus for 2016 of $3.55.

It is expected to report fourth quarter earnings on Feb 9.

A Buying Opportunity?

Shares haven’t really done much in the last year. They were up only 5.1% in that time period and are off their 2016 highs.

That is under performing the major stock indexes.

You’re paying for the growth though as the shares are trading with a forward P/E of 22.5. That’s not cheap.

But is it time to jump in?

As the global economy heats up, consumers will continue to book travel. Expedia is one of the leading names in the group.

If you’re looking for a high growth name as a play on the consumer, then Expedia is one to keep on your short list.

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