Is It Too Late to Consider Expedia After Its 191.4% Three Year Surge?

• Wondering if Expedia Group is still a good deal after its big run up, or if you have already missed the value story? This breakdown is going to walk through what the market might be pricing in and what it could be overlooking.
• The stock has climbed 1.9% over the last week, 21.7% over the past month, and is now up 41.6% year to date, building on a 40.5% gain over the past year and a 191.4% move in three years.
• Recent headlines have focused on Expedia's ongoing push to streamline its brands and technology platform, along with partnerships aimed at capturing more direct travel demand and loyalty members. Together, these moves have helped shift the narrative from a cyclical rebound story to a more durable, platform driven travel player, which can justify stronger price action when investors buy into the strategy.
• Right now, Simply Wall St’s valuation checks give Expedia Group a 4 out of 6 score for being undervalued, suggesting there is some value support beneath the recent rally, but also room for debate. Next, we will break down what different valuation approaches say about the stock, and later we will look at a more holistic way to think about its true worth that goes beyond the usual multiples and models.

Expedia Group delivered 40.5% returns over the last year. See how this stacks up to the rest of the Hospitality industry.

Approach 1: Expedia Group Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow (DCF) model estimates what a business is worth today by projecting its future cash flows and then discounting those back into $ terms at today’s value. For Expedia Group, the model starts from last twelve month free cash flow of about $2.9 billion and uses analyst forecasts for the next few years, then extrapolates further using Simply Wall St’s assumptions.

Those projections in this model have free cash flow reaching roughly $4.9 billion by 2035 as the platform scales and margins improve. Aggregating and discounting these future $ cash flows under a 2 Stage Free Cash Flow to Equity framework produces an estimated intrinsic value of about $521.63 per share for this analysis.

According to this DCF output, the stock appears roughly 49.7% undervalued relative to its current market price, indicating that the modeled cash generation and growth profile are not fully reflected in the present valuation.

Result: UNDERVALUED (per this DCF model)

Our Discounted Cash Flow (DCF) analysis suggests Expedia Group is undervalued by 49.7%. Track this in your watchlist or portfolio, or discover 921 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Expedia Group.

Approach 2: Expedia Group Price vs Earnings

For a profitable business like Expedia Group, the price to earnings (PE) ratio is a practical way to gauge how much investors are willing to pay today for each dollar of current earnings. In general, the higher the expected growth and the lower the perceived risk, the higher a company’s normal or fair PE multiple tends to be, and the opposite is true for slower or riskier names.

Expedia Group currently trades on a PE of about 23.17x, which is above the broader Hospitality industry average of roughly 21.25x but below the peer group average of 27.93x. To move beyond these blunt comparisons, Simply Wall St estimates a proprietary Fair Ratio of 29.64x for Expedia Group, which reflects its specific earnings growth outlook, risk profile, profitability, industry positioning and market cap.

This Fair Ratio is more tailored than a simple industry or peer benchmark because it adjusts for the company’s own fundamentals rather than assuming it should trade like the average travel stock. Comparing the current PE of 23.17x with the Fair Ratio of 29.64x suggests that, on an earnings multiple basis, Expedia Group still screens as undervalued.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your Expedia Group Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, a simple framework on Simply Wall St’s Community page that lets you tell the story behind your numbers. You can link your view of Expedia Group’s future revenue, earnings and margins to a concrete forecast and fair value estimate, then compare that fair value to today’s share price to decide whether to buy, hold or sell. Your Narrative automatically updates as fresh news, earnings and guidance arrive. For example, a bullish investor might build a Narrative around accelerating international expansion, AI driven efficiency and a fair value closer to the higher analyst target near $290. A more cautious investor could create a Narrative focused on competitive AI pressure, softer US demand and a fair value nearer the lower end around $168. Both investors would be using the same tool to translate their story into numbers and a dynamic valuation signal.

Do you think there's more to the story for Expedia Group? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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