Expedia Group: opportunity for growth supported by potential acquisition by Uber

Current stock status and development

Expedia Group, Inc $EXPE, a leading player in the online travel market, is facing a challenging period but is showing signs of a turnaround under the leadership of new CEO Ariane Gorin. The company's current stock price is $150.84, down 0.24%. Recently, there were reports that Uber Technologies is considering the acquisition of Expedia by $EXPE, which could strengthen its market position and increase its stock value.

Improvements under the new CEO and potential acquisitions

According to a senior analyst ClearBridge Investments, Naveen Jayasundaram, the company is making improvements under the new CEO. market share and efficiency. Gorin is focused on improving key brands such as Expedia, Hotels.com and VRBOwhich strengthens the company's competitive position against Booking Holdings (BKNG)which, together with Expedia, dominates the global bookings market (42% share).

A potential acquisition by Uber could be a strategic move to better exploit synergies. Dara Khosrowshahi, Uber's current CEO, was previously CEO of Expedia $EXPE and remains a member of its board, increasing speculation about a possible merger.

Strengths and challenges

Expedia $EXPE continues to focus on expansion and growth through the VRBO brand and the development of its B2B division, which allows other players in the market to leverage Expedia's inventory. The company is also benefiting from a new loyalty program, One Key, which has contributed to revenue growth and free cash flow. Expedia reported free cash flow of $1.3 billion in the most recent quarter , up 42% from the prior year.

Despite the strengths, Expedia $EXPEfaces challenges in the form of a decline in travel demand compared to the post-pandemic period and potential pressure from large technology players such as Google that could impact the online booking segment. However, with its diverse offering and strong platform, it remains resilient to such challenges.

Outlook and valuation

Expedia $EXPE trades at 11 times forward earnings, which is significantly lower than Booking Holdings ' 22 times. Analysts expect earnings per share to grow 21.5% this year and add another 20% in 2025 , with about 7% annual revenue growth. These numbers suggest the company could be wildly undervalued, presenting an interesting investment opportunity.

Conclusion

Expedia Group is currently in the of transformation and growthmaking it an attractive investment with the potential for solid returns. The new CEO and her strategy are delivering results that position the company to outperform its competitors. The potential acquisition by Uber could accelerate expansion and increase Expedia's market value. Although challenges remain, particularly in terms of competition and travel demand, analysts believe that Expedia has strong fundamentals and potential for further growth.