Expedia (EXPE): Buy, Sell, or Hold Post Q2 Earnings?

September 03, 2025 at 00:00 AM EDT

EXPE Cover Image

Expedia has followed the market’s trajectory closely, rising in tandem with the S&P 500 over the past six months. The stock has climbed by 9.7% to $212.24 per share while the index has gained 9.7%.

Is there a buying opportunity in Expedia, or does it present a risk to your portfolio? Get the full stock story straight from our expert analysts, it’s free.

Why Is Expedia Not Exciting?

We're sitting this one out for now. Here are three reasons we avoid EXPE and a stock we'd rather own.

1. Customer Spending Decreases, Engagement Falling?

Average revenue per booking (ARPB) is a critical metric to track because it not only measures how much users book on its platform but also the commission that Expedia can charge.

Expedia’s ARPB fell over the last two years, averaging 1.5% annual declines. This isn’t great, but the increase in room nights booked is more relevant for assessing long-term business potential. We’ll monitor the situation closely; if Expedia tries boosting ARPB by taking a more aggressive approach to monetization, it’s unclear whether bookings can continue growing at the current pace. Expedia ARPB

2. Projected Revenue Growth Is Slim

Forecasted revenues by Wall Street analysts signal a company’s potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite.

Over the next 12 months, sell-side analysts expect Expedia’s revenue to rise by 5.3%, a deceleration versus This projection is underwhelming and suggests its products and services will face some demand challenges.

3. Poor Marketing Efficiency Drains Profits

Consumer internet businesses like Expedia grow from a combination of product virality, paid advertisement, and incentives (unlike enterprise software products, which are often sold by dedicated sales teams).

It’s very expensive for Expedia to acquire new users as the company has spent 63.5% of its gross profit on sales and marketing expenses over the last year. This inefficiency indicates a highly competitive environment with little differentiation between Expedia and its peers. Expedia User Acquisition Efficiency

Final Judgment

Expedia’s business quality ultimately falls short of our standards. That said, the stock currently trades at 8.5× forward EV/EBITDA (or $212.24 per share). This valuation multiple is fair, but we don’t have much faith in the company. We're fairly confident there are better stocks to buy right now. We’d suggest looking at a top digital advertising platform riding the creator economy.

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