Expedia Analyst Roundup After Q3 Results

Expedia Inc. EXPE reported Q3 results Thursday and beat expectations.  The stock immediately rallied amid the news, soaring over 5 percent.  

As of Friday morning the stock traded at $84.56, up 4.74 percent.

Analysts commented on the company after the earnings release, below are their thoughts along with current ratings and price targets.

Credit Suisse - Neutral, $87 price target
While we remain on the sidelines given continued concerns that competitive pressures from Booking's US entry are still to come and that the effect of Hotwire's challenges could be amplified in seasonally larger quarters, we were encouraged to see the strong room night growth, which in part puts to rest some uncertainty that tough comps from platform enhancements will have a negative impact. More broadly we do see the OTA group as having a marked advantage in the mobile/tablet channel, which could be a catalyst for share gains and believe Expedia’s made the right investments early.

Benchmark - Buy, $97 price target
Management reiterated FY14 EBITDA guidance, calling for 16-19 percent growth, citing reinvestment in areas of opportunity along with incremental losses expected at eLong due to increased competition. As a result, none of the profit upside from 3Q will flow through until 2015, and with increased investment in eLong and Trivago along with further marketing deleverage, we expect minimal EBITDA margin expansion next year. With that said, Expedia continues to benefit on the top line from previous investment outlays and we suspect 2015 will be no different, calling for 13 percent revenue growth even after anniversarying Travelocity in 1Q15. Our modestly higher revenue forecast brings our EPS up from $4.40 to $4.65.

J.P. Morgan - Market Perform, no price target
Strength at Trivago and growth in hotel supply led to strong results across Expedia’s core brands, although increased competition in China impacted room nights growth at eLong. While Expedia continues to execute well, we maintain our Market Perform rating as we look for sustained international bookings growth, and, in our view, Expedia’s partnership with Travelocity could lead to more difficult domestic booking comps in 2015. We continue to prefer shares of Priceline Group Inc. PCLN MO; $1,450 PT, within the online travel subsector given its higher growth profile, exposure to international markets, greater overall profitability.