EXPEDIA GROUP, INC. (EXPE): what the price assumes

In the published model solve dated 2026-Q2, anchored at $329.00, EXPEDIA GROUP, INC. (EXPE) is priced for +13.6% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-07-26.

Generated: 2026-08-30 · Exported: 2026-08-31 · Source: https://boothcheck.com/report/EXPE

Headline

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

The operating-margin figure is value-band context at year 11: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

Solve inputs: computed at a 10.9% cost of capital with 4% terminal growth over a 5-year stage.

How unusual the bet is: within-range (limited comparison data)

Valuation X-Ray

The price is supported by earnings-power and relative-multiple and growth-DCF value, while asset-based lands below the price. A value/asset-supported name, not a pure growth bet.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Families that justify the price: Earnings, Relative, Growth Families that call it expensive: Asset

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.2%); the inversion above states its own rate.

Per-Model Detail (n=15)

Economic-Unit Decomposition (Sum Of The Parts)

One or more material disclosed units has unresolved economics. Unknown/general is not evidence of homogeneity: segment SOTP is primary but incomplete, consolidated cash flow may remain only a secondary cross-check when every unit shares an enterprise basis, and one sector multiple or target margin is withheld.

No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.

Solvency

Bullet Takeaways

• The growth is no longer in the consumer brands: business-to-business revenue rose 18% to 4.84 billion dollars in 2025 while the consumer segment managed 2%, and trivago's third-party revenue rose 33%.

• Most of what sits on the balance sheet belongs to travellers. Deferred merchant bookings, money collected for trips not yet taken, reached 15.0 billion dollars at the end of March 2026 against 10.4 billion three months earlier, which is seasonality rather than strength.

• Second-quarter results are due August 5, 2026, and they will be the first full set presented by a finance chief who started on May 11, 2026.

Bull Case

Two businesses live inside Expedia Group and they are at different stages, which is why a single description of the company keeps failing. The consumer brands, Expedia and Hotels.com and Vrbo, are mature: 9.47 billion dollars of revenue in 2025, up 2%. The business-to-business arm, which supplies hotel inventory and booking technology to airlines, banks and other travel sellers, produced 4.84 billion dollars and grew 18%. One third of revenue is compounding at nearly triple the rate of the other two thirds, and it has done so for two consecutive years.

The consequence shows in operating profit rather than in the top line. Operating income was 1.03 billion dollars in 2023, 1.32 billion in 2024 and 1.87 billion in 2025, against revenue that rose 7% and then 8% over the same stretch. Profit rising roughly five times as fast as revenue is what happens when incremental bookings flow through a marketplace whose fixed costs are already paid for. The March 2026 quarter carried the pattern further: operating income of 251 million dollars against an operating loss of 70 million in the same quarter a year earlier, on revenue of 3.43 billion.

What defends the position is supply, not brand. The 2025 filing counts approximately 3.6 million bookable lodging properties on the platform, of which roughly 2.4 million are alternative accommodations reached through Vrbo and about 1.2 million are hotels and other properties. Signing 3.6 million independent hotels and homeowners is not a thing a competitor accomplishes with a budget; it takes years of local sales work in dozens of countries. That inventory is also what makes the business-to-business offering saleable, since an airline embedding hotel booking into its app wants breadth it cannot assemble itself.

Room nights booked grew 8% in 2025, a shade below the prior year's pace, while average daily rates for rooms booked moved up by only a single percentage point. Volume, not price, is carrying the growth. That distinction matters because rate-driven growth reverses when the travel cycle turns and volume-driven growth generally does not reverse as sharply.

Capital allocation has been aggressive to the point of being the loudest signal in the filings. The company spent 1.93 billion dollars repurchasing stock in 2025 and a further 788 million in the March 2026 quarter alone, while also retiring 1.69 billion of maturing borrowings. The diluted share count went from 131.9 million for full-year 2025 to 121.8 million in the March quarter. Management is buying its own equity at a pace that would retire the company inside a decade, which is either conviction or a shortage of better ideas, and the operating numbers currently argue for the former.

Bear Case

The variable with the most leverage over this business is not travel demand. It is how a traveller finds a hotel, and that is decided by companies Expedia does not control. The 2025 filing states the exposure without softening it: "Search or metasearch engines could, for competitive or other purposes, alter their search algorithms or display of results which could cause a website to rank lower in search query results or inhibit participation in the search" marketplace. The same document goes further on what is arriving next: "The rapid emergence and adoption of generative and agentic AI is likely to further intensify competition for our services from established technology companies and new market entrants who may deploy AI-driven travel search, planning, and booking capabilities more" quickly. An online travel agency is, structurally, a toll booth on a road somebody else built. Nothing in the current price reflects the road being rerouted.

The margin gap says the toll is not being collected efficiently. BOOKING HOLDINGS (BKNG) runs a 32.6% operating margin on 27.69 billion dollars of revenue and grew 15% last year. AIRBNB (ABNB) runs 20.5% on 12.65 billion and grew 12.6%. Expedia converts closer to a seventh of revenue into operating profit and grew 8%. The gap has narrowed over the last two years, and the bull case is that it keeps narrowing. The bear reading is that a decade of the same three competitors chasing the same hotels has already revealed who has the better economics, and it is not this one.

Supplier economics are the second pressure point, and the risk section is explicit that they can move against the company: hotels may not "elect to participate in our platform", and there is no assurance that "our compensation, access to inventory or access to inventory at competitive rates will not be further reduced or eliminated in the future". Large chains have spent a decade building direct booking programmes for exactly this reason. Every point of commission a chain claws back comes out of a revenue line where the associated cost has already been incurred.

The balance sheet needs reading with care rather than comfort. Deferred merchant bookings, the money travellers have paid for stays that have not yet happened, stood at 15.0 billion dollars at March 31, 2026, up from 10.4 billion at the end of December. Against that sits 5.5 billion dollars of unrestricted balances and a further 2.2 billion held restricted. In a normal year the float builds through the booking season and unwinds as people travel. In a year when bookings stall, the float unwinds without being refilled, and that is the mechanism by which a travel demand shock reaches an online agency's liquidity faster than it reaches its income statement.

Which brings the argument to the price. The stock does not look expensive against the standard frames, and that is precisely the shape a value trap takes in a business facing distribution disruption: the multiple is modest because the market is discounting the durability of the earnings rather than the level of them. If search and agentic assistants keep more of the booking journey, the affected line is not next quarter's profit but the number of years the current profit lasts. No valuation method in common use prices that well, and the modest multiple is the market's rough attempt to.

Valuation

Start with the earnings the price is actually buying, because they have moved a long way. Operating income was 1.03 billion dollars in 2023, 1.32 billion in 2024, and 1.87 billion in 2025; adding the March 2026 quarter and removing the year-ago one takes the trailing figure to roughly 2.19 billion. Against an enterprise value near 29 billion dollars, that puts the whole business at about thirteen times its operating profit. For a marketplace growing revenue 8% with a third of that revenue growing at 18%, the multiple is undemanding.

The methods reflect that. Peer multiples, the no-growth earnings-power approaches, and the forward cash-flow approaches all land at or above the current quote rather than beneath it. That is an unusual pattern for a well-known consumer internet name, and it is not a signal that the methods are being generous; the forward approaches are anchored on cash generation the marketplace genuinely produces. What sits below the price is the book-value lens, which is close to meaningless for a company whose assets are contracts, code and 3.6 million supplier relationships rather than property.

The cohort explains where the discount comes from. BOOKING HOLDINGS (BKNG) earns a 32.6% operating margin and grew 15%; AIRBNB (ABNB) earns 20.5% and grew 12.6%. Expedia converts roughly a seventh of revenue into operating profit and grew 8%. Below it in the same cohort, TRIPADVISOR (TRIP) manages 3.7% on 2% growth and GLOBAL BUSINESS TRAVEL (GBTG) 2.7%, so the sector is not uniformly profitable and Expedia sits nearer the top of it than the bottom. What a buyer pays a lower multiple for, relative to the leader, is a business earning less than half the leader's margin on slower growth.

Two figures in the report deserve a caution rather than a conclusion. Cash conversion looks extraordinary because a large part of it is float: travellers pay Expedia before they travel, and Expedia pays hotels after. The deferred merchant bookings balance rose from 10.4 billion dollars at December 2025 to 15.0 billion at March 2026, which is the seasonal booking build rather than earnings. Any method that capitalises free cash flow is capitalising some of that swing.

Solvency itself is straightforward. Borrowings stood at 4.47 billion dollars at the end of March with nothing current, after 1.69 billion of maturities were retired during the quarter, and a 2.5 billion dollar revolving facility arranged on March 27, 2026 sits entirely undrawn. The company is not burning money and is not constrained. The open question is the one the multiple already asks: how many years of this earnings level a buyer is entitled to assume.

Catalysts

Second-quarter results are scheduled for August 5, 2026. They arrive with a new signature on them: Scott Schenkel stepped down as chief financial officer effective May 11, 2026, and Derek Andersen was appointed to succeed him, announced April 23, 2026. The filing states the departure was not the result of any disagreement over accounting or operations. A finance chief's first full quarter is usually the one in which disclosure conventions get revisited, so the shape of the release is worth as much attention as the numbers in it.

The comparison the August print faces is the easiest one on the calendar and then the hardest. The March 2026 quarter swung to 251 million dollars of operating income from a 70 million operating loss a year earlier, on revenue of 3.43 billion against 2.99 billion. June is a seasonally larger quarter for bookings, so the second-quarter figures set the base for the rest of the year, and the deferred merchant bookings balance built through March has to convert into travelled stays over the summer.

Analysts have been moving in one direction into the print. Goldman Sachs raised its target to 330 dollars from 328 on July 20, 2026, Baird to 294 dollars from 290 on July 24, 2026, and Wedbush assumed coverage on July 15, 2026 at 334 dollars. All three sit above the current quote, which is consistent with what the standard valuation frames show for this business; what the street is crediting, and what this framework does not attempt to price, is the durability of the distribution position over the years those targets implicitly assume. On the financing side, the March 27, 2026 credit agreement gives the company a 2.5 billion dollar revolving facility that was undrawn at signing, so there is no refinancing event on the near calendar.

Peer Cohorts (Per Segment, With Filing Citations)

B2C (reported)

• BKNG (Booking Holdings Inc.)
• FY2025 10-K: …foreign currency exchange rates, search engine bidding algorithms, channel mix, our ability to convert paid traffic to booking customers, and the timing and effectiveness of our brand marketing and social media marketing campaigns. In 2025, our average ROI was down slightly year-over-year driven by changes in paid…
• FY2025 10-K: …create capacity for reinvestments in our strategic priorities for long-term value creation; and • broadening our supply and increasing flight and attraction ticket growth at Booking.com and Agoda. Our common stock is listed on the NASDAQ Global Select Market under the symbol "BKNG." We refer to our company and our…
• TRIP (TRIPADVISOR, INC.)
• FY2025 10-K: …for profitability. The Experiences segment includes both Viator and Tripadvisor points-of-sale. Viator is a pure-play experiences online travel agency ("OTA"), offering an online global marketplace focused on merchandising bookable experiences to travelers that typically have relatively higher purchase intent either…
• FY2025 10-K: …to a decrease in hotel metasearch revenue and, to a lesser extent, a decrease in hotel B2B revenue. These decreases were driven primarily by continued headwinds impacting both free and paid marketing channels, resulting in lower click volumes, which more than offset growth in pricing as measured in cost-per-click…
• ABNB (Airbnb, Inc.)
• FY2025 10-K: Rule 12b-2 of the Exchange Act. Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised…
• FY2025 10-K: …and often cross-list their offerings. We compete for hosts based on factors like booking volume, platform usability, service fees, host protections, brand, and reputation. Guests also have various options for booking accommodations, experiences, and services, and we compete on inventory uniqueness, value and all-in…

B2B (reported)

• GBTG (Global Business Travel Group, Inc.)
• FY2025 10-K: …products/services and loyalty points to business travelers who purchase directly from such travel suppliers through B2C channels. We also compete against clients determining to self-manage their business travel. We compete, to a lesser extent, with credit card loyalty programs, online travel search and price…
• FY2025 10-K: …existing term loans under the Amended Credit Agreement. At the option of the Initial Borrower (upon prior written notice), the repriced term loans may be voluntarily prepaid, in whole or in part, at any time without premium or penalty (other than (x) a prepayment premium of 1 % of the principal amount of the Term B-2…
• TRIP (TRIPADVISOR, INC.)
• FY2025 10-K: …advertised on our platform. We earn a commission from our travel partners, based on a pre-determined contractual commission rate, for each traveler who clicks to and books a hotel reservation on the travel partner's website, which results in a traveler stay. CPA revenue is billable only upon the completion of each…
• FY2025 10-K: …guidance platform, which includes hotel metasearch, and related advertising offerings primarily for hotels and restaurants and, to a lesser extent, cruises through our branded subsidiary Cruise Critic. Hotels and Other revenue is generated primarily through click-based advertising including cost-per-click ("CPC") and…
• BKNG (Booking Holdings Inc.)
• FY2025 10-K: …create capacity for reinvestments in our strategic priorities for long-term value creation; and • broadening our supply and increasing flight and attraction ticket growth at Booking.com and Agoda. Our common stock is listed on the NASDAQ Global Select Market under the symbol "BKNG." We refer to our company and our…
• FY2025 10-K: …and a price comparison tool. Gen AI has also improved customer service resolution times and customer satisfaction. We also aim to establish mutually beneficial relationships with our partners. We believe they benefit from participating in our services by increasing their distribution channels, demand, profile and…

trivago (reported)

• TRIP (TRIPADVISOR, INC.)
• FY2025 10-K: …of UGC differentiates Tripadvisor from other travel platforms that are primarily transaction-focused or supplier-driven. Tripadvisor's platform enables travelers to research, compare, and plan travel with the benefit of authentic traveler feedback serving trusted guidance. This positioning allows Tripadvisor to…
• FY2025 10-K: …includes Tripadvisor's points-of-sale for experiences. Viator's global online marketplace focus is merchandising bookable experiences to travelers that typically have relatively higher purchase intent either pre-destination or in-destination. Tripadvisor is an online global travel guidance platform that also…
• BKNG (Booking Holdings Inc.)
• FY2025 10-K: …to change certain of its business practices. Agoda received a draft decision, which it has responded to, and its discussions with the DGCCRF are ongoing. In June 2025, the Hellenic Competition Commission (in Greece) opened a formal investigation into whether certain practices by Booking.com may produce adverse…
• FY2025 10-K: European business users of online platforms. The DMA and DSA give EU regulators more instruments to investigate and regulate digital businesses and impose additional rules and requirements on platforms designated as "gatekeepers" under the DMA and online platforms more generally, with separate rules for "Very Large…
• GOOGL (ALPHABET INC.)
• FY2025 10-K: 001652044 us-gaap:RevolvingCreditFacilityMember 2024-12-31 0001652044 goog:TechnicalInfrastructureMember 2024-12-31 0001652044 goog:TechnicalInfrastructureMember 2025-12-31 0001652044 goog:OfficeSpaceMember 2024-12-31 0001652044 goog:OfficeSpaceMember 2025-12-31 0001652044 goog:CorporateAndOtherAssetsMember 2024-12-31…
• FY2025 10-K: Member 2025-12-31 0001652044 us-gaap:StateAndLocalJurisdictionMember us-gaap:ResearchMember 2025-12-31 0001652044 us-gaap:OperatingSegmentsMember goog:GoogleServicesMember 2023-01-01 2023-12-31 0001652044 us-gaap:OperatingSegmentsMember goog:GoogleServicesMember 2024-01-01 2024-12-31 0001652044…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.