Expedia Enters an Investment Phase, But Its Network Advantage Appears Intact; Shares Undervalued
The two main takeaways from Expedia’s third-quarter results are its plans for increased investment and continued signs its network advantage (source of its narrow moat) is intact. While the higher spend will dampen near-term profits and lead to a planned $5-$10 drop in our $175 fair value estimate, we see little reason to alter our sales forecast of 10% annual growth the next 10 years, as the company’s take-rate and room night trends appear intact, supporting its network effect. We think the sel...Expedia Group is an online travel company. The company's portfolio of brands includes: Expedia.com?, an online travel brand; Hotels.com?, a global lodging company operating websites with its Hotels.com? Rewards loyalty program; Vrbo?, a global online marketplace with a focus on providing lodging options for families; Egencia?, a corporate travel management company; Hotwire?, an online travel website providing spontaneous travel through its Hot Rate? deals; trivago?, an online hotel metasearch platform; and SilverRail Technologies, Inc., provider of a global rail retail and distribution platform connecting rail carriers and suppliers to both online and offline travel distributors.
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