Stock Analysis & Valuation Expedia Group, Inc. (E3X1.DE)

• Previous Close: €223.80
• Sector Valuation Confidence Level: Moderate

Valuation method	Value, €	Upside, %
Artificial intelligence (AI)	n/a	n/a
Intrinsic value (DCF)		n/a
Graham-Dodd Method	5.80	-97
Graham Formula	117.00	-48

Strategic Investment Analysis

Company Overview

Expedia Group, Inc. (E3X1.DE) is a leading global online travel company headquartered in Seattle, Washington, providing a comprehensive range of travel products and services to both leisure and corporate travelers. Operating through four key segments—Core Online Travel Agencies (Core OTA), trivago, Egencia, and HomeAway—Expedia Group leverages a diversified portfolio of brands, including Expedia.com, Hotels.com, Orbitz.com, and Travelocity, to serve customers worldwide. The Core OTA segment offers travel booking and advertising services, while trivago specializes in hotel metasearch, Egencia focuses on corporate travel management, and HomeAway operates a vacation rental marketplace. With a market capitalization of approximately €17.56 billion and a workforce of 24,500 employees, Expedia Group is a dominant player in the consumer cyclical sector, particularly in travel services. The company's strong digital presence, extensive brand portfolio, and global reach position it as a key facilitator of online travel bookings, catering to evolving consumer preferences in the post-pandemic travel landscape.

Investment Summary

Expedia Group presents a compelling investment case with its diversified revenue streams, strong brand recognition, and robust operating cash flow of €3.09 billion. The company's ability to generate €1.23 billion in net income and €8.95 diluted EPS highlights its profitability despite the competitive travel industry. However, investors should consider the high beta of 1.657, indicating significant volatility relative to the market, and the substantial total debt of €6.53 billion. The travel sector's sensitivity to economic cycles and geopolitical events also poses risks. Expedia's strategic focus on digital transformation and global expansion could drive long-term growth, but competition from other online travel agencies and metasearch platforms remains intense.

Competitive Analysis

Expedia Group's competitive advantage lies in its diversified brand portfolio and global scale, enabling it to capture a broad customer base across leisure and corporate travel segments. The company's Core OTA segment benefits from strong brand recognition (Expedia.com, Hotels.com) and a vast affiliate network, while trivago's metasearch platform provides an additional revenue stream. Egencia's corporate travel solutions differentiate Expedia from pure leisure-focused competitors, and HomeAway's vacation rental marketplace competes directly with Airbnb. However, Expedia faces intense competition from Booking Holdings and Airbnb, which dominate specific niches (hotel bookings and vacation rentals, respectively). Expedia's ability to integrate its various brands and leverage cross-selling opportunities is a key strength, but its reliance on third-party inventory (hotels, airlines) limits pricing control. The company's technological investments in AI and personalized recommendations are critical to maintaining competitiveness against agile rivals like Google Travel.

Major Competitors

• Booking Holdings Inc. (BKNG): Booking Holdings, the parent company of Booking.com, Priceline, and Kayak, is Expedia's largest competitor, with a stronger international presence, particularly in Europe. Its dominant market share in hotel bookings and aggressive marketing spend give it an edge, but it lacks Expedia's diversified corporate travel (Egencia) and vacation rental (HomeAway) segments. Booking's higher profitability (net margin ~25%) and larger scale make it a formidable rival.
• Airbnb Inc. (ABNB): Airbnb specializes in alternative accommodations, directly competing with Expedia's HomeAway. Its asset-light model and strong brand loyalty in the vacation rental space pose a threat, but Expedia's integrated platform (combining flights, hotels, and rentals) offers a broader value proposition. Airbnb's lack of a traditional hotel inventory limits its appeal to certain traveler segments.
• Tripadvisor Inc. (TRIP): Tripadvisor's strength lies in its user-generated reviews and metasearch capabilities, competing with Expedia's trivago. However, Tripadvisor's reliance on advertising revenue (vs. Expedia's direct bookings) makes it more vulnerable to economic downturns. Expedia's ownership of both OTA (Expedia.com) and metasearch (trivago) assets gives it a more balanced revenue mix.
• Trip.com Group Ltd. (TCOM): Trip.com is Expedia's primary competitor in Asia, with a strong domestic presence in China and growing international reach. Its deep integration with local suppliers gives it an advantage in APAC markets where Expedia is less dominant. However, geopolitical risks and regulatory challenges in China limit its global threat to Expedia.
• Despegar.com Corp. (DESP.L): Despegar is a key player in Latin America, competing with Expedia in emerging markets. Its localized approach and strong regional partnerships are strengths, but its smaller scale and limited brand recognition outside LATAM reduce its global competitiveness. Expedia's superior technology and resources give it an edge in cross-border travel.