Why Expedia's Share Price Is Popping

Key Points

Expedia beat Wall Street revenue and earnings estimates. Management also raised full-year revenue growth guidance. Travel demand is a major factor behind Expedia's strong revenue and earnings growth. These 10 stocks could mint the next wave of millionaires ›

Expedia (NASDAQ: EXPE) is up 21% since Wednesday, Nov. 5.

What's going on with the online travel company?

Well, it reported third-quarter results Thursday morning, and they were extremely solid.

Revenue for the quarter rose 9% year over year to just over $4.4 billion. The consensus Wall Street estimate was for $4.3 billion. And earnings came in at $7.57 a share, which was 23% higher than a year ago and 9% higher than Wall Street's estimate of $6.95 a share.

The company also reported 11% year-over-year growth in booked room nights, its fastest pace of room night growth in more than three years, with business-to-business sales driving the growth.

Raised guidance

Best of all, management raised its guidance for full-year 2025 revenue growth to 6%-7%. Previous guidance was for 3% to 5% growth. And it now estimates gross bookings for the year will climb 7%; previously it predicted that would rise 3% to 5%.Image source: Getty Images.

CEO Ariane Gorin said the better-than-expected quarterly performance and revised guidance reflect an improved travel demand environment.

Investors love when a company raises guidance, as it's a good sign that things are trending in the right direction. And company insiders have a much better view on future performance than investors. Plus, share prices reflect future earnings growth, so a rosier outlook will nearly always lift the stock price.

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Matthew Benjamin has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Why Expedia's Share Price Is Popping was originally published by The Motley Fool

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