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, attractive valuation levels, good cash flow from operations, expanding profit margins and notable return on equity. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.
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Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 20.0%. Since the same quarter one year prior, revenues rose by 17.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Net operating cash flow has significantly increased by 835.47% to $53.31 million when compared to the same quarter last year. In addition, EXPEDIA INC has also vastly surpassed the industry average cash flow growth rate of 17.45%.
- The gross profit margin for EXPEDIA INC is currently very high, coming in at 83.30%. Regardless of EXPE's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, EXPE's net profit margin of 14.30% significantly outperformed against the industry.
- 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., together with its subsidiaries, operates as an online travel company in the United States and internationally. Expedia has a market cap of $7.33 billion and is part of the services sector and leisure industry. The company has a P/E ratio of 23.4, above the S&P 500 P/E ratio of 17.7. Shares are up 106.8% year to date as of the close of trading on Wednesday.
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--Written by a member of TheStreet Ratings Staff.
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