Expedia Group

Methodology

Expedia's online travel agency business generates moderate earnings predictability from lodging and travel bookings, though consumer discretionary spending sensitivity creates cyclicality. The recovery from COVID and shift to direct booking channels add uncertainty. Fair value works best when normalizing for travel demand cycles and accounting for mid-single-digit growth from market share gains and alternative accommodations.

Methodology

Expedia typically trades at PEG ratios between 1.0-2.0x, reflecting concerns about competitive pressures from Booking Holdings and hotel direct booking initiatives. The company's brand portfolio and loyalty programs support steady market share. PEG works reasonably well when considering long-term travel industry growth despite ongoing competitive and margin pressures.

Methodology

Expedia doesn't pay dividends and uses free cash flow for strategic investments in technology and aggressive share buybacks. Management prioritizes capital returns through opportunistic repurchases when stock appears undervalued. Total return depends on market share stabilization and margin expansion as the platform integrates and scales post-pandemic.