Bear of the Day: Expedia (EXPE)


June 05, 2013 |

A big miss on the Zacks Consensus Estimate in Q1 has analysts scrambling to cut 2013 estimates on Expedia Inc. (EXPE - Free Report) . Growth is now expected to decline on this Zacks Rank #5 (Strong Sell) by 8.4% in 2013.

Expedia is a well known online travel company that operates several travel sites in the United States and globally including,, and, in China, eLong.

Expedia is the majority holder in eLong which is a bright spot in the business. It saw 71% year over year growth in room nights in China in the first quarter.

Big Miss Spooks Investors

On Apr 25, Expedia reported first quarter results and despite growing revenue 24% year over year due to strong growth in the Americas, Europe and Asia-Pacific, it wasn't quite as good as the analysts had been hoping for.

It reported a loss of 24 cents, missing the Zacks Consensus by 35 cents, or 318%. It was the first earnings miss in 5 quarters.

Investors showed no mercy as they sold off the shares.

7 estimates were revised lower for 2013 in the last 60 days. The full year Zacks Consensus Estimate has fallen to $2.58 from $3.03 just 2 months ago.

The result is that Expedia has fallen to a Zacks Rank #5 (Strong Sell).

Despite the earnings miss, the analysts still like the online travel space. But investors might want to consider Priceline (PCLN), a Zacks Rank #3 (Hold), until the dust settles on Expedia.

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Tracey Ryniec is the Value Stock Strategist for She is also the Editor of the Turnaround Trader and Value Investor services. You can follow her on twitter at @TraceyRyniec.

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