Ok so here it goes. Expedia draws and attains customers by finding the lowest priced discounts for hotels, flights, rentals and such. The fact that this is sought after and convenient to use creates the industry of an online travel agent. Expedia was extremely successful as the first and best performing online travel company, starting in 1996. Yes it was that early, and it was novel, game changing. Nobody else had these services outside of more expensive in person agents.
The problem? Expedia no longer has an advantage over any other identical services. Go directly to google or an airline and find the same cheap flight or cheaper, with a simpler process. Booking a hotel directly they will now offer you the same discount and price as Expedia, with added benefits to credit card members or loyalty guests. Loyalty and card holders at airlines get the same.
So at this point, with a 55 P/E and down 47% from a peak, it really feels like the revenue source is just being stolen away by competition. At the same time, COVID rebound really seemed to send the stock ahead of itself, EXPE is still up 120% since COVID crash.
I’m going for puts. ITM maybe around October to look for a dip in to the fall. What kind of added value does this company have the ability to continue to generate when every service it offers is free and accessible elsewhere.
Disclaimer: This information is only for educational purposes. Do not make any investment decisions based on the information in this article. Do you own due diligence or consult your financial professional before making any investment decision.