Expedia Group, Inc. (EXPE)
Online Travel (OTA)
Expedia Group compounds per-share value at an uncommon pace: revenue accelerating (+12% TTM, with B2B at +18-23%), EBIT margin expanding with the company's own guidance corroborating it, and a buyback that has cut the diluted share count by 24% since 2022 — all at an exit multiple that does not reward that profile, trading near its 52-week high without the market crediting the second-half 2026 acceleration.
- Price
- $326.97
- Intrinsic value (5y, base)
- $819
- Total annual return (5y)
- 20.6%
- Status (nominal)
- Very undervalued
- Margin of safety
- +51%
The essentials
- TTM revenue accelerating to +12% year over year, with B2B (+18-23%) as the engine ahead of B2C (+2-8%).
- TTM EBIT margin of 15.97%, up from 12.70% in 2025, corroborated by the company's own guidance for margin expansion in 2026.
- Sustained buyback: the diluted share count fell 24% since 2022, with a quarterly dividend reinstated in 2025.
Intrinsic value — two valuation methods
Total return at 5 years: 20.7%/year = 20.2% appreciation + 0.5% dividend. The target price ($819) is ex-dividend; the $11 in dividends collected over 5 years are added separately.
By both methods, the value today (DCF $651 · Multiples $667) exceeds the market price ($327).
Pillars of the analysis
The verdict — today vs 5 years
Today — with margin of safety: at $327 trades ~51.0% below its value discounted to today (~$667) — the wide discount we require (≥38%, equivalent to a ~15% annual return); the risk is covered by the margin, not the rate.
At 5 years — Muy infravalorado: the target price ($819) plus dividends yield above the required average return (10%) — the business compounds.
The bridge: the return at 5 years comfortably exceeds the risk-free rate (4.5%) — and the discount reaches the required margin of safety.
Thesis
The business
A capital-light global travel marketplace, with a high-growth B2B segment (+18-23% year over year) that already accounts for a third of revenue and is expanding consolidated margin faster than the mature B2C business. Negative working capital (float from the merchant model) funds part of the operation without additional own capital.
The valuation
Valued on EV/EBIT — the correct metric for a capital-light marketplace that already bears its tax burden and whose capex is below depreciation. The base case projects year-5 EBIT at a multiple of 15× today compressing toward the online-travel archetype, giving a 5-year value that implies a +21% annual return at the market price.
The margin of safety
There is a margin of safety: the market's perception is meaningfully worse than reality. At the market price, the implied annual return of +21% comfortably clears the great-investment bar (15%), and the verdict is Very undervalued.
What to watch
The central disconfirmer is whether the substitution of search by agentic AI assistants erodes traffic intermediated by Expedia faster than the company can integrate those same capabilities into its own product — that is where the stable-moat thesis is tested first.
Educational / informational. Does not constitute investment advice.