Expedia (EXPE): Time to Buy The Toll-Taker on Global Travel?

Expedia (NASDAQ: EXPE) isn’t building planes, launching cruise ships, or operating resorts. But it’s still getting paid every time someone books a trip. 

That’s the beauty of its model — Expedia is effectively a toll booth on global travel, collecting fees from both consumers and businesses as money flows through the $9 trillion travel industry.

Currently, EXPE is scoring a B or Buy in our Zen Ratings system, where B-rated stocks have historically generated average returns of 19.88% a year. 

It may also be one of the most misunderstood and underappreciated plays in the market today. 

Here’s why:

The Backbone of Travel Booking

While investors chase buzzy AI names and hot consumer brands, Expedia is quietly cementing itself as the backbone of travel booking — not just for consumers, but increasingly for enterprise partners. 

Through its Expedia Partner Solutions (EPS) arm, the company powers booking engines for credit card rewards programs, international travel agencies, and even other travel brands. This B2B business is stickier, more defensible, and growing faster than most people realize. In fact, its gross bookings grew 24% respectively in the fourth quarter of last year alone.

Meanwhile, Expedia’s consumer platforms — including Expedia.com, Vrbo, Hotels.com, Orbitz, and Travelocity — continue to benefit from global tailwinds. The rise of hybrid work means more mid-week travel. Millennials and Gen Z are also prioritizing experiences over possessions. A 2023 report by Eventbrite found that 78% of Millennials and 68% of Gen Z prefer spending their money on experiences rather than material goods (Source).

Plus, long-term, we’re seeing billions of people in developing countries move into the middle class and start exploring the world.

Yes, travel can be cyclical. Yes, recessions can hurt. But the secular trend is clear: more people, with more money, booking more trips online. And Expedia doesn’t need to own the planes or hotels to win — it just needs to be the infrastructure layer that facilitates the booking.

A Closer Look at EXPE Stock

A few more things we like about EXPE?

• B-Rated in our system, with solid financials and rising analyst sentiment
• High-margin asset-light model, especially compared to capital-intensive competitors like cruise lines or airlines
• Strong buybacks: Expedia has reduced its share count by ~25% over the past five years
• Vrbo exposure gives it unique leverage to the short-term rental trend, competing directly with Airbnb (NASDAQ: ABNB)

Top analysts we track rate the company a consensus buy, with no sell or strong sell ratings. The minimum forecast is essentially flat to slightly down, while the average to max upside implies 35-60% gains:

Click here to see analysts price targets for EXPE.

Plus, EXPE scores an A in Value in our Component Grades, with Bs in Growth and Financials. The strong Financials score accounts for factors like:

• Long-term debt to assets: Assesses leverage and the company's debt burden relative to its assets.
• Cost reduction: Tracks operational efficiency improvements through cost savings.
• Return on equity (ROE): Measures a company's profitability in relation to shareholders' equity.

We think these financial metrics are some of the most underrated predictors of future returns and exciting gains … click here to learn why.

Bottom Line?

The market hasn’t fully woken up to Expedia’s evolution from a price-comparison site to a full-stack, omni-channel travel platform. 

But if you’re looking for a way to play long-term growth in global travel — without trying to pick winners in aviation, hotels, or cruise lines — Expedia may just be one of the best toll-takers in town.

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