Expedia Gains on ‘Solid Results’ but Analysts Warn Lodging Bookings are Slowing

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Shares of Expedia (NASDAQ:EXPE) are up more than 5% in premarket trading on Friday after the company reported better-than-expected Q2 results.

Expedia reported Q2 adjusted EPS of $1.96, compared to a loss per share of $1.13 in the year-ago period, and above the consensus estimates of $1.53 per share. Revenue came in at $3.18 billion, up 51% YoY and topping the analyst consensus of $2.99 billion.

Lodging revenue stood at $2.40 billion, beating the analyst estimates of $2.21 billion. Gross bookings totaled $26.14 billion, while analysts were expecting $26.07 billion. Expedia reported $79.1 million in Stayed Room Nights, missing the consensus projection of $87.5 million.

A Piper Sandler analyst said that Q2 results were “slightly better than expected”.

“Lodging bookings cadence through July suggest a deceleration, but we like management’s focus on driving customer LTV. Urban appears to be improving substantially, while US & EMEA long-haul remains suppressed. We upgraded EXPE to OW driven by a return to lodging and strong US travel. Our thesis remains intact,” he said.

An analyst from Mizuho cut the price target on EXPE stock to $132 from $172 to reflect lower estimates amid slowing lodging bookings.

“We expect the next focus is FY23 and macro uncertainties that could cause consumers to trade down or reduce high-ASP categories such as travel. Therefore, we view Street revenue growth of 14% YoY in FY23 aggressive compared to our new forecast of 10%. Extrapolating into longer-term, we lower our FY24E EBITDA by ~10% to $3.1bn,” he wrote in a note.