Expedia’s Stock Tumbles as Softening Travel Demand Weighs on Bookings

Expedia Group (NASDAQ: EXPE) shares plunged on Friday after the online travel booking giant reported first-quarter results that revealed concerning signs of weakening domestic travel demand. While the company beat on earnings per share, its gross bookings and revenue fell short of Wall Street expectations, triggering analyst downgrades and raising broader concerns about the health of the U.S. travel sector amid growing economic uncertainties.

Expedia Group Reports First-Quarter Results, Bookings Fall Short of Forecasts

Expedia Group reported first-quarter results that beat on earnings but missed on key revenue metrics, signaling potential trouble for the travel sector. The company posted earnings per share of $0.47, exceeding analyst expectations by 31%, but its gross bookings across platforms for hotel, flight, car rental, and vacation home reservations totaled just $31.5 billion, falling short of the $31.8 billion consensus estimate.

Customers booked a total of 107.7 million nights through Expedia’s travel websites—including Expedia.com, Hotels.com, and Vrbo—which was also below analysts’ projections. In the earnings announcement, CEO Ariane Gorin acknowledged the challenges, stating, “We posted first quarter bookings and revenue within our guidance range despite weaker than expected demand in the US.” The company’s revenue came in at $2.98 billion for the quarter, missing analysts’ expectations of $3.01 billion according to LSEG data.

Following the results, several Wall Street firms, including Piper Sandler, downgraded Expedia stock, with Barclays analysts noting that “It’s clear that US travel has downshifted.” The disappointing performance has prompted at least four brokerages to cut their price targets on the stock.

This earnings miss is particularly significant as it comes before the peak summer travel season, traditionally the industry’s strongest period, suggesting that economic uncertainty may be weighing more heavily on consumer spending than previously anticipated.

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Softening Travel Demand a Warning Sign for Travel Stocks

Expedia’s performance is especially important as a barometer for the broader U.S. travel sector since nearly two-thirds of its revenue comes from domestic sources, making it a strong bellwether for both travel trends and discretionary consumer spending.

The company’s weaker-than-expected results suggest that American travelers are becoming more cautious with their spending even before feeling the full impact of the ongoing tariff concerns between major economies.

This softening demand appears to be part of a broader industry trend, with hotel operator Hilton recently cutting its annual forecast for room revenue growth and Airbnb (NASDAQ: ABNB) noting that its booking window was shortening—a sign of consumer uncertainty and caution in travel spending.

The timing of this slowdown is concerning as it comes ahead of the peak summer travel season and amid escalating global trade tensions. The travel industry had already experienced a “growth scare” during the summer of 2024, when elevated costs and election uncertainty dampened demand during what should have been a busy period.

This pattern of weakening demand could indicate broader economic concerns, as travel spending is often one of the first discretionary expenses consumers cut when feeling financial pressure.

Expedia Stock Brief

Expedia Group (EXPE) shares were trading at $155.72, down $13.27 or 7.85% from the previous close of $168.99 as of 11:39 AM EST. The stock has moved in a daily range of $148.55 to $158.61, with trading volume of 3,378,346 shares, already exceeding the average daily volume of 2,370,951. The selloff has pushed Expedia’s market capitalization down to $19.90 billion from yesterday’s $21.56 billion. Year-to-date, the stock has declined 16.09%, significantly underperforming the S&P 500’s 3.78% decline over the same period.

The PE ratio stands at 17.41, with EPS (TTM) at $8.96. Following the earnings report, analyst sentiment has shifted, with multiple downgrades including one from Piper Sandler citing weak B2C trends in the quarter. Despite the current selloff, analysts maintain an average price target of $194.24, suggesting a potential upside of about 24% from current levels.

The stock’s technical indicators show it has broken below key support levels, with the 52-week range spanning from $107.25 to $207.73, indicating significant historical volatility.

Expedia’s forward P/E ratio of 11.82 and PEG ratio of 0.78 suggest the stock may be undervalued at current levels despite near-term headwinds. The company maintains a strong balance sheet with $4.48 billion in cash, though its total debt/equity ratio of 235.58% is relatively high.

Analyst recommendations remain mixed, with most maintaining “Buy” or “Hold” ratings despite the current pressure, though the target price range has widened from $135 to $290, reflecting increased uncertainty about the company’s near-term prospects.

Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.