Expedia (NASDAQ: EXPE), a travel company that offers everything from airline tickets, hotel rooms, car rentals to cruises, is scheduled to announce its fiscal fourth quarter results on Thursday 11 February. We expect Expedia's revenue to come in- line while earning to estimate consensus. The travel sector has been the most affected during the epidemic. While Expedia has seen a drop in demand in Q3, its numbers were still well below 2019 levels. In fact, the trend of air travel and holidays did not fully recover until the danger came. That said, we believe the travel company will continue to show a gradual improvement in sales and profit trends in the coming Q4, but it may be a year or so earlier, when it is similar to pre-epidemic levels Start showing operating trends.
Our forecast shows that Expedia's valuation is over $ 135 per share, which is 4% lower than the current market price of $ 14. Check out our interactive dashboard analysis on Expedia Pre-Earnings: What to Expect in Q4? for more information.
(1) is expected to be consistent with consensus estimates
Trefis estimates Expedia's Q4 2020 revenue at about $ 1.1 billion, according to consensus estimates. In the first nine months of 2020, Expedia's revenue dropped 54% year-over-year (y-o-y). Specifically in Q3, the company's revenue grew nearly 2020% sequentially from $ 566 million in Q2 2020 to $ 1.5 billion in Q3 2020. But revenue was still down 58% from year-on-quarter levels in Q3.
(2) EPS generally lacks consensus estimates
Expedia's Q4 2020 earnings per share are expected to be at a loss of $ 1.99 according to the Trephys analysis - generally lower than the consensus estimate of $ 1.97. The travel company will continue posting losses well next year, as travel demand may continue over the next few months. In 2020, based on 2019 revenues, Expedia plans to cut $ 700 million to $ 750 million in fixed costs, along with $ 200 million relative to 2019, resulting in an increase in potential income from 2022 onwards. is. It should also be noted that Expedia had to take a lot of additional debt to get through the current cash-burn period - bringing its total debt load to over $ 8 billion. Additionally, with increasing cases, it seems that Expedia will be a more heavily indebted company when it all comes to an end.
(3) The stock price is estimated at 6% below the current market price.
Looking at our Expedia valuations, the revenue per share estimate is $ 36.24 and a P / S multiple of about 3.7x in FY 2020, which translates into a price of over $ 135, which is the current market value of 144. 6% less than that. .
While Expedia stock may trade lower post Q4 earnings, 2020 has created a number of pricing dissatisfactions that may offer attractive trading opportunities. For example, you might wonder how counter-intuitive the stock valuation is for Amazon vs. Etsy. Another example is Apple vs Microsoft.
Founded by former investment analyst Naomi Shah, Meet Cute is a romantic-comedy podcast series composed of original 15-minute episodes. Since its launch in February, its more than 200 episodes have been listened to by a million people who want to be entertained.
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