Expedia Group Inc (EXPE, Financial) has recently experienced a notable uptick in its stock performance, with an 11.84% gain over the past week and a 21.34% gain over the past three months. The company's market capitalization now stands at $18.1 billion, with a current price of $130.36 per share. Despite these gains, the GF Value of $189.93 suggests that the stock may still be undervalued, although it has risen from the past GF Value of $179.55. However, the GF Valuation remains at "Possible Value Trap, Think Twice," unchanged from the past valuation, indicating that investors should approach with caution.
Company Overview
Expedia Group Inc, a giant in the Travel & Leisure industry, operates as the world's second-largest online travel agency by bookings. The company's diverse portfolio includes services for lodging, air tickets, rental cars, cruises, and other travel-related offerings, with lodging making up the majority of its 2022 sales. Expedia's branded travel booking sites, such as Expedia.com, Hotels.com, and Vrbo, are well-known in the market. The company primarily generates revenue through transaction fees for online bookings. 
Assessing Profitability
Expedia's Profitability Rank stands at 6/10, reflecting a solid position within the industry. The company's Operating Margin is at 10.94%, which is commendable compared to its peers. Additionally, Expedia boasts a high Return on Equity (ROE) of 42.89%, a Return on Assets (ROA) of 3.61%, and a Return on Invested Capital (ROIC) of 4.41%. These figures indicate that Expedia is proficient at generating profits from its equity, assets, and invested capital, respectively. The company has also maintained profitability for 9 out of the past 10 years, showcasing its consistent performance. 
Growth Trajectory
Despite its profitability, Expedia's Growth Rank is low at 1/10. The company has seen a 3-Year Revenue Growth Rate per Share of -3.60% and a 5-Year Revenue Growth Rate per Share of -2.70%. However, future estimates are more optimistic, with a Total Revenue Growth Rate (Future 3Y To 5Y Est) of 8.27% and an EPS Growth Rate (Future 3Y To 5Y Est) of 43.70%. These projections suggest potential for significant improvement in Expedia's growth trajectory. 
Key Shareholders
Notable investors in Expedia include Ken Fisher (Trades, Portfolio), holding 1,380,096 shares (0.99% share percentage), Larry Robbins (Trades, Portfolio) with 807,135 shares (0.58% share percentage), and Steven Cohen (Trades, Portfolio) who owns 608,364 shares (0.44% share percentage). The involvement of these significant shareholders could influence the company's strategic decisions and potentially impact its stock performance.
Competitive Landscape
When compared to its competitors, Expedia's market cap of $18.1 billion positions it within a competitive range. Carnival Corp (CCL, Financial) has a slightly higher market cap of $19.03 billion, while Norwegian Cruise Line Holdings Ltd (NCLH, Financial) is smaller at $6.25 billion. Royal Caribbean Group (RCL, Financial) stands out with a market cap of $26.16 billion. These companies, although in the same industry, have different market capitalizations, reflecting their varying scales and market positions.
Conclusion
In summary, Expedia Group Inc's recent stock price surge can be attributed to its solid profitability metrics and optimistic future growth estimates. While the GF Valuation advises caution, the company's strong ROE, ROA, and ROIC, along with its consistent profitability history, provide a compelling case for investors. The influence of key shareholders and the competitive landscape also play crucial roles in shaping Expedia's market positioning. As the travel industry continues to recover and evolve, Expedia's adaptability and strategic initiatives will be critical in maintaining its upward trajectory.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
