EXPE
EXPE
Accumulate 2026-03-12
Model
DCF
Price at Report
$230.35
Base IV
$274.78
Bear IV
$175.08
Bull IV
$401.91
Entry Zone: 190-230 · Sell Above: 340
Bore Family Office
Valuation Report — Expedia Group (EXPE) • March 12, 2026
Unlevered DCF (FCFF @ WACC) • Discount Rate: 10.50% • Current Price: $230.35
Prepared by Lurch • Bore Family Office • Data: Finnhub, StockAnalysis.com, S&P Global Market Intelligence
🏢 Business Overview
Expedia Group is the world's second-largest online travel agency (OTA), operating a portfolio of travel brands including Expedia, Hotels.com, Vrbo, Orbitz, and Travelport. The company competes primarily with Booking Holdings (BKNG) and increasingly with Airbnb, Google Travel, and direct-booking channels. Expedia has been executing a significant strategic transformation under CEO Ariane Gorin — consolidating to fewer brands, investing heavily in AI-driven personalization and its B2B technology platform (Expedia for Business), and aggressively returning capital through share buybacks. Gross bookings exceeded $110B in 2025, and the company generated $3.1B in reported FCF with improving operating margins at 12.7%.
| Business Segment | Revenue | % of Total | YoY Growth | Margin | Notes |
|---|---|---|---|---|---|
| B2C Travel (Expedia, Hotels.com, Vrbo) | $12,524M | 85% | +7.0% | — | Core OTA business; hotel, flight, vacation rental bookings |
| B2B (Expedia for Business / Technology) | $2,209M | 15% | +15.0% | — | White-label travel tech for airlines, hotels, corporates; fastest growing |
📊 Financial Snapshot
| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue ($M) | $8,598 | $11,667 | $12,839 | $13,691 | $14,733 |
| EBITDA ($M) | $1,000 | $1,877 | $1,840 | $2,157 | $2,758 |
| Operating Income ($M) | $186 | $1,085 | $1,033 | $1,319 | $1,871 |
| Net Income ($M) | $-269 | $352 | $797 | $1,234 | $1,294 |
| EPS (diluted) | $-1.80 | $2.17 | $5.31 | $8.95 | $9.81 |
| Free Cash Flow ($M) | $3,075 | $2,778 | $1,844 | $2,329 | $3,110 |
| Annual DPS | $0.000 | $0.000 | $0.000 | $0.000 | $1.600 |
| Total Debt ($M) | $8,810 | $6,552 | $6,567 | $6,531 | $6,415 |
| Rev YoY Growth | — | +35.7% | +10.0% | +6.6% | +7.6% |
⚙️ WACC Build (DCF)
| Input | Value | Notes |
|---|---|---|
| Risk-Free Rate (Rf) | 4.30% | 10-yr US Treasury yield |
| Beta (β) | 1.400 | Market beta (Finnhub) |
| Equity Risk Premium (ERP) | 5.5% | Damodaran US ERP |
| Cost of Equity (Ke) | 12.05% | Ke = Rf + β × ERP |
| Pre-Tax Cost of Debt | 4.50% | Interest exp / gross debt |
| After-Tax Cost of Debt (Kd) | 3.68% | × (1 − 18%) |
| Weight Equity (We) | 76.0% | Mkt cap $0.0B |
| Weight Debt (Wd) | 24.0% | Gross debt $0.0B |
| WACC | 10.50% | DCF discount rate |
📈 DCF Scenarios
$175
🔴 Bear
$275
📊 Base
$402
🚀 Bull
$230.35
Current Price
$275
Analyst Avg PT
| Scenario | Stage 1 (Yrs 1–5) | Stage 2 (Yrs 6–10) | Terminal g | WACC | Intrinsic Value | vs Price |
|---|---|---|---|---|---|---|
| 🔴 Bear | 5.0% | 3.0% | 2.0% | 10.50% | $175 | ▼24.0% |
| 📊 Base | 12.0% | 7.0% | 2.5% | 10.50% | $275 | ▲19.3% |
| 🚀 Bull | 18.0% | 10.0% | 3.0% | 10.50% | $402 | ▲74.5% |
📋 Full 10-Year Projection Tables
Bear Scenario
Stage 1: 5.0% | Stage 2: 3.0% | Terminal: 2.0%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $1.78B | $1.62B | $1.62B |
| Year 2 | Stage 1 | $1.87B | $1.53B | $3.15B |
| Year 3 | Stage 1 | $1.97B | $1.46B | $4.61B |
| Year 4 | Stage 1 | $2.07B | $1.39B | $5.99B |
| Year 5 | Stage 1 | $2.17B | $1.32B | $7.31B |
| Year 6 | Stage 2 | $2.23B | $1.23B | $8.54B |
| Year 7 | Stage 2 | $2.30B | $1.14B | $9.68B |
| Year 8 | Stage 2 | $2.37B | $1.07B | $10.75B |
| Year 9 | Stage 2 | $2.44B | $0.99B | $11.74B |
| Year 10 | Stage 2 | $2.52B | $0.93B | $12.67B |
| Terminal | — | TV=$30.2B | PV(TV)=$11.1B (47% of EV) | EV=$23.8B |
Base Scenario
Stage 1: 12.0% | Stage 2: 7.0% | Terminal: 2.5%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $1.90B | $1.72B | $1.72B |
| Year 2 | Stage 1 | $2.13B | $1.75B | $3.47B |
| Year 3 | Stage 1 | $2.39B | $1.77B | $5.24B |
| Year 4 | Stage 1 | $2.67B | $1.79B | $7.03B |
| Year 5 | Stage 1 | $3.00B | $1.82B | $8.85B |
| Year 6 | Stage 2 | $3.21B | $1.76B | $10.61B |
| Year 7 | Stage 2 | $3.43B | $1.71B | $12.32B |
| Year 8 | Stage 2 | $3.67B | $1.65B | $13.97B |
| Year 9 | Stage 2 | $3.93B | $1.60B | $15.57B |
| Year 10 | Stage 2 | $4.20B | $1.55B | $17.12B |
| Terminal | — | TV=$53.8B | PV(TV)=$19.8B (54% of EV) | EV=$37.0B |
Bull Scenario
Stage 1: 18.0% | Stage 2: 10.0% | Terminal: 3.0%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $2.01B | $1.82B | $1.82B |
| Year 2 | Stage 1 | $2.37B | $1.94B | $3.75B |
| Year 3 | Stage 1 | $2.79B | $2.07B | $5.82B |
| Year 4 | Stage 1 | $3.30B | $2.21B | $8.03B |
| Year 5 | Stage 1 | $3.89B | $2.36B | $10.40B |
| Year 6 | Stage 2 | $4.28B | $2.35B | $12.75B |
| Year 7 | Stage 2 | $4.71B | $2.34B | $15.09B |
| Year 8 | Stage 2 | $5.18B | $2.33B | $17.41B |
| Year 9 | Stage 2 | $5.69B | $2.32B | $19.73B |
| Year 10 | Stage 2 | $6.26B | $2.31B | $22.04B |
| Terminal | — | TV=$86.0B | PV(TV)=$31.7B (59% of EV) | EV=$53.7B |
🔲 Sensitivity Table
| WACC \ gT | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 8.5% | $342 | $359 | $379 | $402 | $430 |
| 9.0% | $317 | $330 | $347 | $365 | $388 |
| 9.5% | $294 | $306 | $319 | $335 | $353 |
| 10.0% | $274 | $284 | $295 | $308 | $323 |
| 10.5% | $257 | $265 | $275 | $286 | $298 |
| 11.0% | $241 | $248 | $257 | $266 | $276 |
| 11.5% | $227 | $233 | $240 | $248 | $257 |
| 12.0% | $215 | $220 | $226 | $233 | $240 |
| 12.5% | $203 | $208 | $213 | $219 | $225 |
Green = >10% above current price. Red = >10% below. Gold = within ±10%.
📉 Long-Term Price Trend Channel
Log-linear trend fitted to full price history. ±1.5σ bands. Green shaded zone = bottom 25% of historical range — historically attractive entry.
🏦 Comparable Valuation
| Company | Price | Fwd P/E | EV/EBITDA | P/FCF | Yield | Consensus |
|---|---|---|---|---|---|---|
| Expedia Group (EXPE) | $230 | 11.7× | 8.4× | 7.4× | 0.7% | Buy |
| Booking Holdings (BKNG) | $4,820 | 22.9× | 15.8× | 21× | 1.1% | Buy |
| Airbnb (ABNB) | $128 | 31.2× | 19.4× | 22× | 0.0% | Hold |
| TripAdvisor (TRIP) | $15 | 18.5× | 9.2× | 14× | 0.0% | Hold |
| Trip.com (TCOM) | $68 | 19.8× | 10.5× | 16× | 0.0% | Buy |
💰 Dividend / Distribution Analysis
| Metric | Value |
|---|---|
| Annual DPS | $1.600 |
| Current Yield | 0.69% |
| Consecutive Growth Years | 1 |
| 1-yr DPS CAGR | +0.0% |
| 3-yr DPS CAGR | +0.0% |
| 5-yr DPS CAGR | +0.0% |
| 10-yr DPS CAGR | — |
| Payout Ratio (DPS/EPS) | 16.3% |
| FCF Payout Ratio | 6.8% |
| Sustainability Verdict | ✅ Safe |
Dividend initiated in 2025 at a conservative $1.60/share. Payout ratio of 16% of EPS and only 7% of FCF means enormous coverage headroom. With FCF growing strongly, dividend growth in coming years is highly probable. Primary capital return vehicle remains buybacks (FCF yield ~10%), not dividends.
🔮 Analyst Forecast Section
(a) EPS Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2021 | $-1.80 | — | — | — | Actual |
| 2022 | $2.17 | — | — | — | Actual |
| 2023 | $5.31 | — | — | — | Actual |
| 2024 | $8.95 | — | — | — | Actual |
| 2025 | $9.81 | — | — | — | Actual |
| 2026 | $15.07 | $19.63 | $25.29 | 40 | Estimate |
| 2027 | $16.91 | $22.98 | $32.01 | 35 | Estimate |
(b) Revenue Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2021 | $8.6B | — | — | — | Actual |
| 2022 | $11.7B | — | — | — | Actual |
| 2023 | $12.8B | — | — | — | Actual |
| 2024 | $13.7B | — | — | — | Actual |
| 2025 | $14.7B | — | — | — | Actual |
| 2026 | $15.4B | $16.2B | $17.3B | 40 | Estimate |
| 2027 | $16.3B | $17.4B | $19.1B | 35 | Estimate |
(c) Individual Analyst Price Targets
Consensus: Avg $275.37 | Range $200–$360
| Analyst | Firm | Rating | PT | Upside |
|---|---|---|---|---|
| Various Analysts | Strong Buy Cluster | Strong Buy | $360 | +56.3% |
| Scott Devitt | Wedbush | Hold | $260 | +12.9% |
| Tom White | DA Davidson | Hold | $260 | +12.9% |
| Brian Pitz | BMO Capital | Hold | $255 | +10.7% |
| Lloyd Walmsley | Mizuho | Hold | $245 | +6.4% |
(d) Earnings Surprise History
| Quarter | EPS Act vs Est | EPS Beat/Miss | Rev Act vs Est | Rev Beat/Miss | Guidance |
|---|---|---|---|---|---|
| Q1 2025 | $1.33 vs $1.10 | +$0.23 ✅ | $3.2B vs $3.0B | +$0.1B ✅ | Raised |
| Q2 2025 | $3.85 vs $3.55 | +$0.30 ✅ | $4.0B vs $3.8B | +$0.1B ✅ | Raised |
| Q3 2025 | $4.06 vs $3.88 | +$0.18 ✅ | $4.2B vs $4.0B | +$0.1B ✅ | Maintained |
| Q4 2025 | $0.57 vs $0.30 | +$0.27 ✅ | $3.4B vs $3.3B | +$0.1B ✅ | Raised |
(e) Confidence Band Commentary
Large analyst coverage (40 analysts) with a bifurcated view — 7 Strong Buy vs 20 Hold. The Hold cluster (Mizuho, Wedbush, BMO, DA Davidson) recently trimmed PTs after Q4 2025 guidance was cautious about 2026 travel demand given macro uncertainty and strong prior comparisons. The wide EPS spread (FY2026 $15–$25) reflects uncertainty around non-GAAP adjustments and whether B2B acceleration materializes as management projects.
💡 Investment Thesis
- Aggressive capital return: Expedia has been buying back shares relentlessly — shares outstanding declined from 162M (2022) to 132M (2025), a 18% reduction. At $230/share and $3.1B FCF, buyback yield exceeds 10% — extremely shareholder-friendly.
- B2B platform optionality: Expedia for Business (white-label travel tech) is growing 15%+ and provides recurring, high-margin revenue from airlines/hotels that want OTA technology without building it themselves — a moat-widening business most investors undervalue.
- AI personalization: New CEO's AI investment in search, recommendations, and trip-planning is early but could differentiate against Booking Holdings and Google.
- Valuation discount vs. peers: EXPE trades at 11.7× FY2026E EPS vs. Booking Holdings (BKNG) at 23× — the discount is too wide given comparable growth and stronger FCF yield.
- Dividend initiated 2025: First dividend ($1.60/sh in 2025) signals management confidence in FCF sustainability and attracts income investors as a new shareholder base.
⚖️ DCF Verdict: Accumulate — Expedia Group (EXPE)
Current price: $230.35 | Analyst Avg PT: $275.37
$175
🔴 Bear
$275
📊 Base
$402
🚀 Bull
| Tier | Price | Action |
|---|---|---|
| Tier 1 — Starter | ≤$230 | Begin position |
| Tier 2 — Add | ≤$210 | Add on weakness |
| Tier 3 — Full | ≤$190 | Full allocation |
| Sell Alert | ≥$340 | Above fair value — consider trimming |
Expedia is a quality OTA franchise trading at a steep discount to peers on EV/FCF basis. At $230, EXPE trades near Base intrinsic value of $275 with 19% upside, and well below the Bull case of $390 which requires only modest acceleration from current trajectory. Accumulate. Build to full position below $230. Starter position warranted at current levels. Becomes a compelling conviction buy below $200.
📂 Current Position Summary
| Metric | Value |
|---|---|
| Shares Held | 187.0 |
| Average Cost Basis | $105.94 |
| Current Market Value | $43,075 |
| Unrealized P&L | $+23,265 (+117.4%) |
| Annual DPS | $1.600/yr |
| Annual Dividend Income | $299/yr |
| Current Yield (at price) | 0.69% |
| Yield on Cost | 1.51% |
| vs Target (~$200K) | $43,075 / $200,000 (22%) |
Bore Family Office • Analysis generated by Lurch • Not investment advice.