It's been a pretty great week for Expedia Group, Inc. (NASDAQ:EXPE) shareholders, with its shares surging 13% to US$181 in the week since its latest third-quarter results. Revenues of US$4.1b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at US$5.04, missing estimates by 4.3%. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the current consensus from Expedia Group's 30 analysts is for revenues of US$14.6b in 2025. This would reflect a solid 9.1% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to jump 30% to US$10.75. In the lead-up to this report, the analysts had been modelling revenues of US$14.6b and earnings per share (EPS) of US$10.89 in 2025. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 14% to US$176. It looks as though they previously had some doubts over whether the business would live up to their expectations. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Expedia Group at US$220 per share, while the most bearish prices it at US$130. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Expedia Group's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Expedia Group's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 7.2% growth on an annualised basis. This is compared to a historical growth rate of 9.7% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 9.7% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Expedia Group.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
With that in mind, we wouldn't be too quick to come to a conclusion on Expedia Group. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Expedia Group analysts - going out to 2026, and you can see them free on our platform here.
It is also worth noting that we have found 2 warning signs for Expedia Group that you need to take into consideration.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
