The online travel company's "strong franchise, exposure to secular tailwinds and continued online travel share gains" are countered by limited opportunity for multiple expansion in the near to medium term, the firm wrote in a note.
Expedia's leading position within the online travel sector will likely continue, given "huge scale advantages" and high barriers to entry, Pacific Crest added.
However, room nights are expected to show decelerating growth, Expedia has numerous major acquisition integrations this year and analysts' EBITDA estimates seem too high for the first half of 2016, according to the firm.
"We believe it's unlikely to get meaningful evidence of the bull case for the foreseeable future," Pacific Crest noted.
Shares of Expedia are flat in pre-market trading after closing at $107.80 on Wednesday.
Separately, TheStreet Ratings team rates the stock as a "hold" with a ratings score of C+.
Expedia's strengths such as its robust revenue growth, reasonable valuation levels and expanding profit margins are countered by weaknesses including unimpressive growth in net income and feeble growth in the company's earnings per share.
You can view the full analysis from the report here: EXPE
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.