Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
) has been reiterated by TheStreet Ratings as a buy with a ratings score of B- . The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, good cash flow from operations, growth in earnings per share and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
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Highlights from the ratings report include:
- EXPE's revenue growth trails the industry average of 24.0%. Since the same quarter one year prior, revenues rose by 13.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Internet & Catalog Retail industry and the overall market on the basis of return on equity, EXPEDIA INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- EXPEDIA INC has improved earnings per share by 18.8% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, EXPEDIA INC reported lower earnings of $2.36 versus $2.94 in the prior year. This year, the market expects an improvement in earnings ($3.02 versus $2.36).
- Net operating cash flow has increased to $552.78 million or 12.65% when compared to the same quarter last year. Despite an increase in cash flow, EXPEDIA INC's cash flow growth rate is still lower than the industry average growth rate of 53.34%.
Expedia, Inc., together with its subsidiaries, operates as an online travel company in the United States and internationally. The company has a P/E ratio of 17.1, below the average leisure industry P/E ratio of 21.1 and below the S&P 500 P/E ratio of 17.7. Expedia has a market cap of $7.2 billion and is part of the
industry. Shares are up 14.8% year to date as of the close of trading on Tuesday.
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--Written by a member of TheStreet Ratings Staff.
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