Value
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 5.4 |
| P/S | 8.9 |
| EV/EBITDA | 4.4 |
| Fwd P/E | 9.1 |
| PEG | 7.8 |
| Analyst target | 4.0 |
- ▸Forward P/E: 11.6x
- ▸PEG: 0.87
EXPE · Why this verdict
Why Expedia Group (EXPE) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.9/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The company has beaten consensus earnings estimates in each of the past four quarters with an average upside surprise exceeding 16%, including a 42% beat in the most recent quarter — a pattern consistent with disciplined, conservative guidance and management that has a reliable handle on operating levers. Earnings | Average quarterly earnings surprise remains above 5% over the next 12 months with no misses, confirming the beat streak is structural rather than episodic. | →Stable |
| CounterBeat streaks of this magnitude can partly reflect a period of especially depressed analyst estimates; if the sell side recalibrates upward, future beats will be harder to achieve even if operating results are unchanged. | ||
The company converts net income into free cash flow at 234% — generating substantially more cash than reported earnings suggest — and operates with a wide economic moat and a Piotroski financial health score of 7 out of 9, characteristics typically associated with businesses that sustain high returns across cycles. Quality breakdown | Free cash flow conversion stays above 150% of net income for the next 12 months, supporting further capital return or debt reduction. | →Stable |
| CounterA leverage ratio of 2.6x debt-to-equity constrains financial flexibility; if operating cash flow softens, debt service and investment requirements can quickly compress the apparent FCF advantage. | ||
At a forward price-to-earnings of 10.3x and a PEG of 0.78, the stock screens as attractively valued relative to its growth rate — a rare discount for a business with a wide economic moat. Valuation breakdown | The forward multiple expands toward 13x or above as earnings growth materializes over the next four quarters, validating the current mispricing. | →Stable |
| CounterThe low multiple may reflect legitimate structural concerns — merchant-model take-rate durability or macro sensitivity — rather than a mispricing; the discount could prove persistent. | ||
The stock is trading below its 200-day moving average, but that average itself continues to rise at roughly 2.1% per month — a configuration suggesting a temporary pullback within an ongoing uptrend rather than a confirmed breakdown. Momentum breakdown | Price reclaims the 200-day moving average within three months while the long-term average continues to slope positively. | →Stable |
| CounterA pullback below the 200-day average combined with a death-cross pattern can persist for extended periods; if the 200-day average begins to flatten or roll over, the pullback-in-uptrend thesis transitions to a confirmed downtrend. | ||
Revenue is heavily concentrated in the merchant model at approximately 70% of the mix, and the technology infrastructure relies on a single major cloud provider — either of which, if disrupted, could have an outsized impact on earnings. A debt-to-equity ratio of 2.6 provides limited cushion if these risks materialize simultaneously. Bear case | Management takes visible steps to reduce supplier or revenue-model concentration within 12 months, providing a strategic buffer against the identified vulnerabilities. | →Stable |
| CounterThe merchant model concentration may be a structural feature that enables the wide moat and superior free cash flow conversion, rather than a fragility — scale advantages in this model can reinforce rather than threaten the business. | ||
The company has beaten consensus earnings estimates in each of the past four quarters with an average upside surprise exceeding 16%, including a 42% beat in the most recent quarter — a pattern consistent with disciplined, conservative guidance and management that has a reliable handle on operating levers.
→StableEarnings
- Expectation
- Average quarterly earnings surprise remains above 5% over the next 12 months with no misses, confirming the beat streak is structural rather than episodic.
CounterBeat streaks of this magnitude can partly reflect a period of especially depressed analyst estimates; if the sell side recalibrates upward, future beats will be harder to achieve even if operating results are unchanged.
The company converts net income into free cash flow at 234% — generating substantially more cash than reported earnings suggest — and operates with a wide economic moat and a Piotroski financial health score of 7 out of 9, characteristics typically associated with businesses that sustain high returns across cycles.
→StableQuality breakdown
- Expectation
- Free cash flow conversion stays above 150% of net income for the next 12 months, supporting further capital return or debt reduction.
CounterA leverage ratio of 2.6x debt-to-equity constrains financial flexibility; if operating cash flow softens, debt service and investment requirements can quickly compress the apparent FCF advantage.
At a forward price-to-earnings of 10.3x and a PEG of 0.78, the stock screens as attractively valued relative to its growth rate — a rare discount for a business with a wide economic moat.
→StableValuation breakdown
- Expectation
- The forward multiple expands toward 13x or above as earnings growth materializes over the next four quarters, validating the current mispricing.
CounterThe low multiple may reflect legitimate structural concerns — merchant-model take-rate durability or macro sensitivity — rather than a mispricing; the discount could prove persistent.
The stock is trading below its 200-day moving average, but that average itself continues to rise at roughly 2.1% per month — a configuration suggesting a temporary pullback within an ongoing uptrend rather than a confirmed breakdown.
→StableMomentum breakdown
- Expectation
- Price reclaims the 200-day moving average within three months while the long-term average continues to slope positively.
CounterA pullback below the 200-day average combined with a death-cross pattern can persist for extended periods; if the 200-day average begins to flatten or roll over, the pullback-in-uptrend thesis transitions to a confirmed downtrend.
Revenue is heavily concentrated in the merchant model at approximately 70% of the mix, and the technology infrastructure relies on a single major cloud provider — either of which, if disrupted, could have an outsized impact on earnings. A debt-to-equity ratio of 2.6 provides limited cushion if these risks materialize simultaneously.
→StableBear case
- Expectation
- Management takes visible steps to reduce supplier or revenue-model concentration within 12 months, providing a strategic buffer against the identified vulnerabilities.
CounterThe merchant model concentration may be a structural feature that enables the wide moat and superior free cash flow conversion, rather than a fragility — scale advantages in this model can reinforce rather than threaten the business.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Expedia has delivered four consecutive earnings beats averaging over 16% upside surprise while trading at a forward multiple of 10.3x and a PEG of 0.78 — a combination suggesting meaningful undervaluation for a business with a wide economic moat and free cash flow conversion at 234% of net income. The risk/reward at the current price falls short of the threshold needed for a fresh entry, warranting patience until the asymmetry improves.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 3.9 |
| Gross margin | 10.0 |
| Op margin | 2.8 |
| Net margin | 4.9 |
| Current ratio | 2.9 |
| FCF quality | 10.0 |
| Moat | 7.5 |
| Rule of 40 | 5.5 |
| Piotroski F | 7.8 |
- ▸Excellent ROE: 71%
- ▸Excellent cash conversion: 234% FCF/NI
- ▸Wide economic moat
- ▸Compounder quality: strong returns + growth
Growth
6.2/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 6.2 |
Momentum
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.4 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 1.7 |
- ▸Overbought (RSI 72)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 3.5 |
| Analyst rating | 7.5 |
| Price target | 6.0 |
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸Negligible insider selling — $1,304,113 (0.004% of mkt cap)
Peer rank
5.3/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.8 |
| quality rank | 6.9 |
| growth rank | 4.7 |
- ▸Superior ROE vs peers
Technical
3.1/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.9 |
| support resistance | 0.5 |
| 52w position | 7.8 |
Risk (lower is worse)
3.9/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 6.0 |
| days to cover | 5.7 |
| volatility | 2.3 |
| put call | 0.0 |
| implied vol | 4.6 |
| beta | 6.1 |
| debt equity | 2.4 |
- ▸Elevated put/call: 3.54
- ▸Concentration risks: 2 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| dividend safety | 5.2 |
| news activity | 5.0 |
- ▸Perfect beat streak: 4Q
- ▸Dividend: 66.0%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (5)
- MOMENTUM:7.0>=5.5
- INSIDER:OK
- EARNINGS_PROXIMITY:34d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.1=NEGATIVE
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-0.13
Upside
-2.0%
Downside
15.0%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 4.4 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Momentum at 7.0) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-0.1=NEGATIVE) reinforce the read. Current asymmetry R:R is -0.13 — supplementary context, not the trigger for this path.
The strongest dimensions are Momentum at 7.0, Value at 6.7, and Catalyst at 6.7; the weakest are Technical at 3.1, Risk (lower is worse) at 3.9, and Insider at 5.0. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of -0.13 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Four Quarter Earnings Beat Streak
Trip ifEPS surprise falls below 0% for 2 consecutive quarters.
- P2Attractive Valuation Low Peg
Trip ifConsensus forward EPS estimates are revised down by more than 20% from current levels, eliminating the apparent valuation discount.
- P3Wide Moat Cash Conversion
Trip ifFree cash flow falls below 100% of net income for 2 consecutive quarters.
- P4Pullback Within Rising Uptrend
Trip ifThe 200-day moving average slope turns negative (below 0%/30d) for 2 consecutive months.
- P5Concentration And Leverage Risk
Trip ifMerchant model revenue concentration falls below 60% for 2 consecutive quarters, indicating meaningful diversification has taken hold.