Shareholders might have noticed that Expedia Group, Inc. (NASDAQ:EXPE) filed its quarterly result this time last week. The early response was not positive, with shares down 5.4% to US$157 in the past week. Revenues were in line with expectations, at US$3.0b, while statutory losses ballooned to US$1.56 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the consensus forecast from Expedia Group's 32 analysts is for revenues of US$14.1b in 2025. This reflects a reasonable 2.5% improvement in revenue compared to the last 12 months. Per-share earnings are expected to step up 10% to US$10.14. Before this earnings report, the analysts had been forecasting revenues of US$14.4b and earnings per share (EPS) of US$10.76 in 2025. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.
Check out our latest analysis for Expedia Group
It might be a surprise to learn that the consensus price target fell 5.8% to US$190, with the analysts clearly linking lower forecast earnings to the performance of the stock price. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Expedia Group, with the most bullish analyst valuing it at US$290 and the most bearish at US$135 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that Expedia Group's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 3.4% growth on an annualised basis. This is compared to a historical growth rate of 15% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 9.8% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Expedia Group.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Expedia Group. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
With that in mind, we wouldn't be too quick to come to a conclusion on Expedia Group. Long-term earnings power is much more important than next year's profits. We have forecasts for Expedia Group going out to 2027, and you can see them free on our platform here.
You can also view our analysis of Expedia Group's balance sheet, and whether we think Expedia Group is carrying too much debt, for free on our platform here.
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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.