Expedia has been a big name for years in the travel and tourism scene, providing people with travel essentials, from tickets to even rentals online. Since 2004, Expedia has proved to be an expert in the business year after year, one which other companies in the same industry look up to and try to emulate.
However, 2022 wasn’t such a great year for the company in the stock market, despite its reputation and history as a pioneer in the travel industry, as the global pandemic and 40-year high inflation took a toll on the business.
Expedia’s Stocks In 2022
The inflation combated last year certainly affected many industries and businesses; unfortunately, Expedia was not exempted. Study from brokerschart.it noted that this was expected as travel companies are usually vulnerable to economic growth. The ongoing inflation is the worst economic episode to be noted in 40 years, so it was only expected that many consumers would significantly reduce their spending in times like this.
Nonetheless, this impact on EXPE stock was very unpleasant as the stock declined from about $185 to $97 YTD. While the stocks fell by about 48%, the S&P also plunged by approximately 18% at the same time.
Is A Rebound Expected From EXPE?
Travel companies being sensitive to economic growth might be bad for business, but it might also be good for business. Certainly, the feds are doing their best to bring down the inflation to a target of about 2%, a goal that will eventually be achieved. When this happens, and inflation reduces, it is only expected for EXPE stocks to make a good rebound. Experts have also forecasted that the stocks will be rewarded with significantly reasonable earnings as inflation continues to subsidize.
However, despite all the hardships, the company has managed to stand its ground excellently. In the third quarter of 2022, the company recorded increased travel demand levels. It also increased the levels of active loyalty members, more than the record set in 2019, which was their best-performing year. Expedia had grown gross booking records yearly from 13 billion in 2004 to over hundred billion in 2019.
As the pandemic and inflation came into the picture, the gross bookings growth was affected in 2020/21. Regardless, Expedia was still on track to post record-breaking revenue by the end of 2022.
Expedia’s third quarter results in 2022 were very impressive as the risk management strategies employed by the company were very effective. The company was able to increase its revenue by about 22% to approximately $3.62 billion. In 2023, the company has also revealed plans to make its app interface even better than what we currently know. The company has also gotten One Key on board, which will help stimulate and increase the membership growth the company has been recording so far.
Expert brokers at Freedom24, https://brokerschart.it/migliori-brokers/freedom24, forecast that Expedia will significantly grow its earnings per share if the company does not relent on its growth efforts.
Is Buying EXPE Stock A Good Investment Move?
The primary risk factor in purchasing this particular stock will be inflation and global recession risks. Recently, the threat of an economic recession is still very much alive as the central bank is still increasing interest rates, so it is uncertain if investing in the market is a good plan.
A risk of recession is easily settled as the central bank will continue to do everything in its power to subsidize such if it happens. Even the worst financial crisis in the last 90 years lasted for only a year, with a GPD decrease of only -1.3%.
In other words, your biggest concern as an investor looking to purchase EXPE stocks is the risk of an economic recession, which will be sorted out eventually by the government. Hence, if that is something you can live with, stock analysts at the XTB broker, https://brokerschart.it/migliori-brokers/xtb, advise that you might just be in luck since the stock’s value is currently low as the company is trading at a 10-year low rate. A further decline might just be the perfect opportunity to add a high-growth stock to your portfolio. You just have to follow the dynamics of the shares and choose the most suitable moment for investment.