Other than a temporary island reversal in February, it looks like smooth sailing for the chart of EXPE, above. Some recent subtle shifts in the indicators point to a possible stalling of Expedia's rally. The On-Balance-Volume (OBV) line has turned flat, and we can see a small bearish divergence in September and October as EXPE made a slight new high while the momentum study made a lower high signaling a slowing of the rally. Meanwhile the 50-day and 200-day moving averages remain positive.
This longer-term chart of EXPE, above, is positive with an impressive four-year rally after a base around the $30 level. The 40-week moving average is supportive as well as the bullish OBV line on this time frame. The Moving Average Convergence Divergence oscillator is also constructive. While EXPE may stall a bit in the short run, our next price objective, based on 5x the base pattern, is the $150 area. A sell-stop under $120 seems appropriate. Sounds like it could finance another vacation!
Separately, TheStreet Ratings team rates EXPEDIA INC as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
We rate EXPEDIA INC (EXPE) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, compelling growth in net income, revenue growth and notable return on equity. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Powered by its strong earnings growth of 404.47% and other important driving factors, this stock has surged by 61.47% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, EXPE should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- EXPEDIA INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, EXPEDIA INC increased its bottom line by earning $3.00 versus $1.66 in the prior year. This year, the market expects an improvement in earnings ($4.13 versus $3.00).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Internet & Catalog Retail industry. The net income increased by 403.1% when compared to the same quarter one year prior, rising from $89.37 million to $449.64 million.
- The revenue growth significantly trails the industry average of 46.3%. Since the same quarter one year prior, revenues rose by 11.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Internet & Catalog Retail industry and the overall market, EXPEDIA INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: EXPE